Analyzing majid’s Income statements and cash flow statements we see that the company had tough time however during good years they did very well. Exhibit 4 shows the companies income statement, which states during 2001 it had a net loss of $9,306 in US millions. However during September 30th, 2003 they were up by $1,424 in US millions. Which is a good improvement that shows the company is growing. The cash flow statements also shows the company is heading in the positive mark by having cash and cash equivalents of $5,186 in US millions. Exhibit 5 shows a forecasted income statement for 2003 – 2005, and forecasts an increase in Net income.
The exit strategy that I suggest for Marvin Chapman is to take no action now. The reason is the company is growing, has high paying clients and the company already has $10 million in cash. The company does not need to raise money since it has good venture capitalists that are not looking for an imminent exit. Have another round for venture capitalist to invest in the company. It is forecasted that the company will have more net income in the next two years and does not have to worry about cash. Both CFO and CEO of majid Corp. does not have any experience going public with a company which is not an appropriate thing to do, Also experts have said that it can wait and take part in going public later on. Although, it has competitors in NASDAQ, those companies have a much lower growth rate. majid Corp. should pursue more clients at this moment and by 2005 look into going public, but not listing in TSX but in NASDAQ. Since no technology company have listed in the TSX since 2000. By listing in NASDAQ will give majid more exposure to the global market, make it competitive and hence it will be accumulating more revenue. However the growth rate might be affected.