[MUSIC] So with the first one, if you remember in the course that we did finance building a robust business, we basically learned a methodology. And that methodology can be applied for the case of poly panel, which is the case that we used back when we did the course and can be used for many other cases in real life. This is a specific case in which we can use this methodology and the methodology had different basic, and systematic steps and this is what I urge you to do. The first step is basically, the decision to be made. What is the decision I have to make in this custom project? What is it? What kind of recommendation do you need to give the CEO? We are faced with a choice, what is the choice? This is what you have to understand. And secondly, we should do a business analysis. In order to give a recommendation, imagine that you are someone that is not in this industry. If you are not in this industry, you need to know how the industry works. What is this company doing? When was the company born? What is the history? What are the team, the management of the company? Whether the company's cyclical or seasonal. We need to know all different things that put us into context for understanding this business both in the past and looking forward to a future perspective, then we will look at the financial statements that you have it in the case. You have the P&L and the balance sheet and we would analyze, you should analyze the P&L and then how did we analyze the P&L when I showed you how to look at financial statements. Well, we look at these four basic lines. What happens with sales of GASGAS? What happened with the margins? Is it good margins or small margins? How about the operational expenses? How big are they? And then what is the ROS, the return on sales? Is GASGAS profitable company or not? And what has been the evolution over the last few years? I mean, you know what happened in the 20 years ago or 10 years ago, but it's important to know what's happening in the company right now, the last three years. And after doing that, we should jump into analyzing the balance sheet. You need to know the business, the P&L and the balance sheet. What is a balance sheet? What does a balance sheet look like? And we said, look, just take one year, analyze the structure of the balance sheet. What is the benefit of GASGAS? How much leverage does it have? Does it have cash or not? What is the quality of the assets looking at the structure of one year? Then after having analyzed that structure, I suggest you do, okay, let's look at the evolution. What happened over the last few years? Has it increased or decreased is the financial situation gotten better or worse to have a grasp of the financial situation? Lastly, how about operation rations? What are the dates of collection, dates of inventory, dates of payable and how they affect the needed funds for operations and working capital? Now once you have all that, then you say, okay, let's look into the future. What are the prospects of this company? And you might want to do a forecast of the future, which assumptions? I don't know, this is up to you. It depends on what you expect from the growth of this company, etc. Now of course, you start first with the forecast of the P&L, but you should do a forecast of the balance sheet. And then when forecasting the balance sheet, it is important that you do a forecast also lead up times for operations and working capital, which are the basic two concepts that you used back then. Once you have all that, we have to do the diagnosis on the action plan. Diagnosis is once you've done the forecast, you look back and then you say, okay, what is the problem with this company? That he has too little cash? That sales are decreasing? That margins are going up or down? What is the problem of this company? What do you see? And then sort of an action plan, what would you do? Now, don't forget that four of the main concepts that we used in the course of finance are going to be very useful for you in analyzing the GASGAS case. Those concepts were, first of all, the need of funds for operations. Which is how much money do you need to produce? This stop you too and that the definition was NFO is equal to receivables plus inventory minus payables. We have to finalize this part of the assets,, that is very important. How are the NFO of the GASGAS company? Then the working capital. Working capital is the capital that is left after I have financed the fixed assets and this led to finance operations. How is it in GASGAS? Then sustainable growth, is this company sustainable? Is it working capital growing at the same pace as the NFO or not? Remember, the crocodile? And then lastly, we do the return composition of the equity. We return equity and we compose the DuPont with ROS turnover and leverage to understand the different steps, different pillars of the strategy of the company. So with this part, you probably are able to grasp a fresh big analysis of the context GASGAS and understand the numbers. Well, to be able to go on to the next part, which is analyze what happens if we partner with KTM. [MUSIC]
