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Associates Section

Commercial Due Diligence


Our Virtual FDs provide Commercial Due Diligence as one of the key ways of evaluating a target company as follows:

Identify Key Profit Drivers - What are the key factors which drive the results of the target business?    Have these drivers been tracked over time? If so how have they developed?  Are any external factors likely to impact the business, such as market changes or new competitive threats?  What opportunities exist both on a standalone basis and as combined business post acquisition?

Financial Modelling - Once the key profit drivers have been identified the target business can be modelled.  Financial modelling is a key strategic tool, firstly to create a Budget but crucially to model the impact of changed assumptions.  This sensitivity analysis (or 'what if' analysis) means that an acquirer can measure the impact of different assumptions, so dramatically reducing his or her perceived risk.

Balance Sheet review - the Balance Sheet accuracy is still crucial, as inaccuracies in a target are likely to imply that an acquirer is over paying for the business.  The Balance Sheet review typically focuses on each type of Asset or Liability, to see whether the value is fairly stated from the viewpoint of the acquirer; therefore this is likely to be in relation to the acquirers accounting policies.



Benefits

The key Benefits are:

  1. Cost Effective
  2. Understanding of key drivers & risks
  3. Helps evaluate business valuation

vfdnet part time Finance Directors have strong experience of preparing companies for Sale and acquisitions - see our transactions. Contact us to discuss your needs.



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