Can Anyone Tell Me That How I Can Investigate Incoming Partner?

The investigator can calculate the real value of assets and liabilities. He can see that incoming partner is not at loss. The book value of assets can be used to find real value. The investigator can examine the future prospectus of business concern. He can collect information about the demand of products. The size of orders, number of customers and future plans can be checked.

The reason for admission may be known to the incoming partner. The shortage of capital or skill or both may be a reason for admission of new partner. The investigator can check the percentage of profit, purchases, sales and items for a number of years. The trend percentage can inform the people about business affairs. The terms of admission can be examined by the investigator. The capital, ratio of profit sharing, salary of manager, operation of accounts, drawing power and similar other matters may be analyses.
The financial stability is linked with responsible working capital.

The current assets must be twice as compared to current liabilities in order to have sound financial stability. The rate of return is necessary for making decision. The profit on sales can be calculated.

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