Executive Summary - Report

Example:

The market entry of XYZ's information technology services and products to China will be made through the establishment of a suitable join venture. XYZ requires extra funds to raise the capital required for the project. XYZ's objective is to minimize the financial risk. To obtain debt financing without diluting control of ownership and management of XYZ is the optimal choice. But high gearing means high risk and the service of a large debt.

The Chinese joint venture is an initial project that promises much potential. As such, XYZ's financial state should not be too highly geared. XYZ should seek equity funding through a public float. XYZ can access a lower cost of funds with longer maturity for debt and diversification of its funds base from an international source. XYZ should seek offshore funding. XYZ should expand within its bounds and obtain funds, both equity and debt, within a reasonable gearing ratio.

Though business opportunities abound in China, it has a relatively high political and operations risk for XYZ. XYZ should invest carefully, minimizing fixed investment and reducing risk exposure. In terms of XYZ's finance risk, XYZ should:

1. Raise funds and sell collection rights for revenue to local and international third parties
2. Use lease options instead of direct purchase
3. Take out appropriate insurance in business and finance dealings.