Asset Holding Company : AHC owns asset procurement ; Owns investor contracts ; Quarterly P/L reviews ; Pays out profits ; Cash flow management
Carrier: Carrier owns MC, Title ; Owns Sales ; Own Truck utilization ; Owns Compliance ; Owns Continued operations ; Repairs & Maintenance ; Driver Management
Investors : Invests $60k ; Earns 60% profit ; No operational burden ; See Quarterly Truck financials
Profit Share : Investors 60%, Operators 40%
Now,
1) Potential Red Flag :
According to financials shared with us, of the last three months, two have the same profit margin - to the 10th decimal place ( 35.xxxx.. %), when for both months Revenue, Fixed and Variable costs ( and of course the profit) figures are different. Super unlikely coincidence? Or am I missing something that would make it seem not so suspicious.
2) Is 60% a usually quoted figure in trucking businesses? The current return of 35% (which is also quite good in itself) is being explained due to reduced activity because of Covid-19
3) What should be my considerations as part of my due diligence for this investment?
TL;DR
Trucking company seeking investment and offering 60% profit share in return, without share or asset ownership. Looking to pick brains on the red flags I am possibly missing.
Submitted May 31, 2020 at 05:43PM by kits678 https://ift.tt/2TXgiN0
