The Endeavor Background
Endeavor is a non-profit organization that offers middle-sized loan products. Founded in 1997, the company uses a business model based on a network of locally funded, self-reliant companies in such countries as Chile, Argentina, Brazil, Uruguay, and Mexico (Endeavor, 2022). The notable feature of Endeavor is the country benefactor model that helps to connect private businesses and CEOs of large companies with local entrepreneurs for investment purposes (Endeavor, 2022). This model provides entrepreneurs with the necessary knowledge to lead their businesses. Primarily, it concerns the areas of raising funds and establishing connections with mentioned prospect investors.
Endeavor’s decentralized and localized business model has definitely proved to be successful. The use of this business model allowed the company to establish several self-sustaining branches in Latin America. The next challenge for Endeavor is to acquire sponsorship for its further expansion and extensive growth. In the absence of sufficient funding from the parent company, this new goal could be achieved by expanding the operation into new territories.
Financial Ratio Analysis
Time-series analysis is conducted by using the data sets from 1997 to 2001. First, the total debt ratio and the return on assets should be examined. It can be seen that Endeavor displays a decrease in the profitability of its assets. The company was able to produce a return on its assets during the 1997 – 2000 period, with a spike in 1998 (Basariya, & Thomas, 2019). After 1999, the return on assets was on the decline, and it stayed negative from 2001 onwards (Table 1). This tendency is presumably related to the rise in operating costs required by the global expansion of Endeavor.
Without sufficient investment in the debt capital or reorienting the company towards a for-profit business model, the return on assets is expected to decline at a similar rate further. Endeavor displays a constant current ratio of 1 during the entire period of observation (Table 1). On the one hand, the debt ratio of 1 means that the company has financed its assets entirely with debt, which poses a significant risk. On the other hand, this ratio shows that the company has displayed its ability to keep the debt in check, proving that it is capable of managing its liabilities.
Table 1
The Rationale for Examining these Ratios
Endeavor is aiming to grow its business and expand its territorially. Therefore, to assess the potential of the company’s assets, it is necessary to examine its ability to fund itself, pay for its liabilities, and to generate revenue. To assess the state of Endeavor’s liquid assets, the liquidity ratio is calculated, leading to a 1:1 ratio, meaning that the company has the exact amount of liquidity to remain in business. This information is used to determine the ability of Endeavor to pay its short-term obligations, which should be paid off in less than 12 months, and is used by the creditors to make the decisions about funding the company. Another factor in this decision is the quick ratio, which calculates at.79 (Table 1). This figure indicates that the company can pay only 79% of its current liabilities, whereas the preferable number is one (or more) to prove long-term viability.
Next is the total debt ratio, a metric showing the ratio of the company’s debt to its assets. Endeavor is shown to have a debt ratio of 100%, indicating that the entirety of its assets is acquired through borrowing (Table 1). It is important to examine the company’s performance in comparison to its competitors. To do this, it is necessary to use the activity ratio, which determines the effectiveness of leveraging the company’s assets to generate revenue. Lastly, it is crucial to keep track of the company’s financial leverage and manage its debts and assets accordingly. Overall, all these metrics and figures must be taken into account before making decisions about the volume of new borrowings and asset purchases.
Recommended Financial Strategy
The latest expansion of Endeavor into Brazil has proved to be successful. Despite being a developing nation, Brazil displays a strong potential for future growth and a wealth of opportunities (Alshowishin, 2021). This expansion allowed the company to gain 56 million in revenue, raise 33 million in funding, and create 33,000 jobs (Alshowishin, 2021). In its next move to expand, Endeavor should strive to replicate and surpass this success. For this, the target nation should meet certain criteria. First, it should have a reasonably advanced economy with wide business structures and adequate protection of property rights. Second, it should have stable and functional government institutions and no risk of social instability. Next, it should have a developed educational system. Last but not the least, there should be a sufficient number of businessmen and corporate managers, receptive and favorable to Endeavor’s mission as a company. It is possible to say that India meets all the mentioned criteria.
To move forward, Endeavor should continue using the “country benefactor model” with added opportunities for monetization. The first version of the company’s monetization practice included an annual fee of 20 thousand dollars; however, this model was estimated to continue the downward trade of the company’s return on assets (Maxim, 2022). To remedy this, a refined model was created, consisting of a 2% fee from total sales over four years (Maxim, 2022). This model should secure the long-term viability of the company and allow it to increase its investment in the company’s growth.
Where Endeavor Should Invest
As was stated earlier, India is a perfect market for the company to get into. With its already big and growing population, India is the fifth largest economy in the world by GDP and the third by PPP (Population, total). India is an incredibly popular tourist destination, which contributes greatly to its economy (Raja & Venkateswaran, 2022). The country is undergoing a significant social change towards a more equitable and free society (Raja & Venkateswaran, 2022). India has a strong culture of entrepreneurship and is advancing in several new industries, from renewable energy to mobile phone and payment processing industries (Sudhakar, 2020). India’s GDP is growing at expanding rate, having surged from 2.7 trillion USD in 2017 to 3.17 trillion USD in 2021 (GDP). Its agriculture is modernizing rapidly: mechanization, new chemical use, new government policies, and sustainable practices are introduced (Patil, 2021). Despite importing its grain, India is a major exporter of agricultural goods, such as fibers and dairy products (Anwer, 2019). All these factors indicate a great potential for a rising entrepreneur class and, therefore, good growth opportunities for Endeavor.
How Endeavor Should Raise Funds
To ensure the full realization of Endeavor’s potential, the company’s management should investigate all possible revenue sources and ways of monetization. Due to Endeavor being a non-profit company, the main way to acquire revenue for them is through fundraising. The company should perform marketing campaigns to promote its values and host charitable events to raise funds. The charitable events will help to establish relationships with local communities and its socially conscious and high-net-worth individuals. The company should promote the positive results of its operation and send a clear signal of its positive impact on the local community. It will help to increase the recognition of the brand, which would lead to a higher amount of donations. The company should work on its social media presence and image and collaborate with various digital donation platforms. Creating high-quality, engaging content should be a priority in this area. Digital presence should help to raise funds not only in the countries where Endeavor operates but all over the world.
Benchmark Against Other Companies
During the financial analysis and total evaluation of the company’s future projections, Endeavor’s benchmark was compared with two non-profit companies: Entrepreneurs Organization and Opportunity International, during the year 2001. Founded in 1987, the Entrepreneurs Organization carries out its mission to help entrepreneurs achieve their full potential (“About us”). Their values are a strong globalist agenda, diversity, expertise, and community building. Opportunity International, which was founded in 1971, concentrates on the empowerment of people living in poverty to change their economic standing with the help of training and financial solutions (“Who are we”). In the lack of profit incentive, non-profit organizations are measuring their performance in such metrics as the amount of money raised, the number of clients served the total job impact, and total revenue (Table 2). These metrics show the efficiency of the companies’ operations and their ability to function successfully.
Table 2
If Proposal is Accepted
The proposed financial strategy has the preservation of Endeavor as a non-profit organization in mind. The company will continue its social mission of providing financial solutions to up-and-coming entrepreneurs in developing countries. Still, the sustainability of the business model should be taken into account. The proposal should provide sufficient revenue and a stable cash flow through membership fees. A percentage fee will allow Endeavor to benefit from the greater success of its clients, while a four-year period will not force them into a life-long commitment.
Ratios
Exhibit A
Liquidity Measures
Current ratio: 
Quick Ratio: 
Exhibit B
Leverage Ratios
Total Debt Ratio: 
Exhibit C
Efficiency measures
Accounts Receivable Turnover: 
= 29.69
Total Asset Turnover: 
Fixed Asset Turnover: 
Exhibit D
Profitability Margins
Net Profit Margin: 
References
Anwer, M. (2019). Agriculture and economic development in India. New Century Publications.
Alshowishin, A. (2021). Financial analysis.International Journal of Scientific and Research Publications, 11(04), 208-211. Web.
About us. (n.d.). Entrepreneurs’ Organization. Web.
Basariya, S. R. & Thomas, J. (2019). A study on the issues of financial ratio analysis. Indian Journal of Public Health Research and Development, 10(3), 10-79.
Endeavor. (2022). Dream Bigger, Scale Faster, Pay it Forward. Web.
GDP (current US $) – India. (n.d.) The World Bank. Web.
Maxim, L. (2022). Model of financial analysis for investments.Annals of Dunarea de Jos University of Galati. Fascicle I. Economics and Applied Informatics, 28(04), 87-96. Web.
Patil, A. (2021). Sustainable agricultural development in India. Multidisciplinary Journal of Educational Research, 10(10), 112–115.
Population, total – India. (n.d.) The World Bank. Web.
Raja, A. & Venkateswaran, A. (2022). The contribution of tourism to economic growth in India. Asian Journal of Research in Marketing, 11(1), 9–14. Web.
Sudhakar, G. (2020). Post pandemic economy – challenges & solutions. Paramount Publishing House. Web.
Who are we: mission, vision, motivation. (n.d.) Opportunity International. Web.