Companies Finance

[Donny Brook]

Originally Posted by Alonsua

So what in this specific case?

Estimated revenues by segment:
https://docs.wixstatic.com/ugd/759d6...85eb5dc4f1.pdf
Stock chart since 1.990:
https://docs.wixstatic.com/ugd/759d6...e27150291c.pdf
The company has ($ In Millions):
Estimated Operating Profit: $144.007
Estimated Net Profit: $39.070 (This is called Resources by Boardroom and Curia)
Yearly Sales Growth: 10,96%
Total Debt: $ 58.573 at 6% yearly

Your entire net profit will fund only an additional $650,000,000 of debt at 6% interest.

[whswhs]

Originally Posted by Alonsua

This... is... too much. I am surprised to say the least. How am I supposed to integrate Boardroom and Curia with this? By this rule, since at 1.990 the company founders were working as "the best of the best" in their fields, their income was at the $420.000-$720.000/month range (average $570.000), so since one of them was actually a CEO for a multinational company with out of the files Finance skill of 24, that means that they could raise $5.700.000.000 with a success of 74.07% at 1.990 instead of $142.800.000 (and this not taking into account any modifiers), and if they work on the same products getting the same monthly results every day and developing the company in the same business verticals, at a CAGR of 32.14% the company is looking at $13.900.000.000.000 by 2018.

I'm not sure what you're doing here.

In the first place, it sounds as if you're talking about making a Finance roll to raise funds based on monthly income, and then make another Finance roll to do so again the next day, or the next month. That's really unreasonable. If your 50% success chance loan was, for example, $1 million, and you borrowed $1 million, and then you tried to borrow another $1 million, your prospective creditor would be looking at how much you already owe. The rules don't spell that out, but it seems as if it should be obvious enough so you wouldn't need it spelled out.

So when you want to borrow that second $1 million, that brings your total debt to $2 million, which is an extra -1 modifier. So I'd say now you have to roll against a 9 effective skill, and if you don't make it, you don't get the extra loan; and if you critically fail, you have problems managing the debt you have and face demands for repayment, maybe.

In the second place, a Finance skill of 24 strikes me as, as I've said, over the top.

Are these results you actually want to have? If so, no need to go into all this backstory; you just say, "This character is insanely rich," and buy suitable levels of Wealth. But if that's a higher level of wealth than you want, then just don't give them "most brilliant financial genius who ever lived." Settle for Finance-18 or -20 and give them the wealth level that goes with that.

[Alonsua]

Originally Posted by Donny Brook

Your entire net profit will fund only an additional $650,000,000 of debt at 6% interest.

39 billions profit will fund 650 millions of debt?

[Donny Brook]

Originally Posted by Alonsua

39 billions profit will fund 650 millions of debt?

Your post said figures in are in millions, and I read the "." as a decimal point. If it's billions, then upsize accordingly.

[Alonsua]

Originally Posted by whswhs

I'm not sure what you're doing here.

In the first place, it sounds as if you're talking about making a Finance roll to raise funds based on monthly income, and then make another Finance roll to do so again the next day, or the next month. That's really unreasonable. If your 50% success chance loan was, for example, $1 million, and you borrowed $1 million, and then you tried to borrow another $1 million, your prospective creditor would be looking at how much you already owe. The rules don't spell that out, but it seems as if it should be obvious enough so you wouldn't need it spelled out.

So when you want to borrow that second $1 million, that brings your total debt to $2 million, which is an extra -1 modifier. So I'd say now you have to roll against a 9 effective skill, and if you don't make it, you don't get the extra loan; and if you critically fail, you have problems managing the debt you have and face demands for repayment, maybe.

In the second place, a Finance skill of 24 strikes me as, as I've said, over the top.

Are these results you actually want to have? If so, no need to go into all this backstory; you just say, "This character is insanely rich," and buy suitable levels of Wealth. But if that's a higher level of wealth than you want, then just don't give them "most brilliant financial genius who ever lived." Settle for Finance-18 or -20 and give them the wealth level that goes with that.

Not the following day, but they could cover every loan in five years and then, with debt 0, ask for a higher loan. Repeat as many times as possible/neccessary and you will own the world in twenty years.

However and working with these... "weird" restrictions, with this mathematic "system" so to say, I have implemented a few details and come to a solution which, though it gives a higher value than expected, do not differ much from my initial calculus, though I dont know if it fits the concept of "loan" anymore, it is a more realistic and elegant solution than I thought and sets a limit, though it can become really high quite easily... so I am yet thinking on an improved solution, such as working with penalties on the primary skill (Finance) of the CEO in order to decrease the resource value which otherwise will always be a minimum of 6%/year, this maybe done through the Rank level or the Speed/range table. I have also erased the bonuses and set a hard limit at 30, with the bonuses working just for increasing success probabilities. (24 +2 Networked +4 Reputation)

*It allows to build Apple a few years earlier at Finance 24, thus so far I think that it works, but things may become problematic in the long run if that 6% is static.

[Alonsua]

Originally Posted by Donny Brook

Your post said figures in are in millions, and I read the "." as a decimal point. If it's billions, then upsize accordingly.

I thought so, I am not familiar with the numbers so I dont really know if its better to use "." or "," as separators :S

[whswhs]

Originally Posted by Alonsua

I thought so, I am not familiar with the numbers so I dont really know if its better to use "." or "," as separators :S

In American usage, "1,000" is one thousand and "1.000" is one, with three significant digits after the decimal point, indicating precision to the nearest 1/1000. I'm familiar with the other convention from having edited a lot of scientific papers by European authors, but I think many Americans will find it confusing.

[whswhs]

Originally Posted by Alonsua

Not the following day, but they could cover every loan in five years and then, with debt 0, ask for a higher loan. Repeat as many times as possible/neccessary and you will own the world in twenty years.

I would need to see the actual series of transactions and the rolls that permit them.

[Donny Brook]

The system used in North America is commas (,) separate the 3-digit groups in large numbers, thus, one million is 1,000,000 and one-hundred billion is 100,000,000,000. The decimal place is marked by a period (.).

Back on the main question: It would seem that your company is profitable enough to fund debt in the hundreds of billions, albeit not $800B. Of course a lender would want to look at the consistency of your performance.

[AlexanderHowl]

It is all handwavium anyway because you are talking about market distorting levels of debt. $800 billion is the debt of entire industries in the USA, so you are probably looking at having the federal government cosign your loans in order to get that much debt. Anyway, 6% interest is unrealistically high in the current monetary climate, where corporate bonds pay less than 2% (just issue bonds and don't bother with the loans).