Advisory & Valuations
Valuation & Financial Model
GBS’s team of experienced professionals has developed a comprehensive Financial Model inclusive of schedules prepared from the historical financials provided by respective clients. GBS also conducts interviews with prospective clients to perform a basic financial analysis AND arrive at a preliminary market valuation range. The source of this analysis is each company’s past three years’ financial statements as well as adjustments provided by the client. Please note that valuation ranges could ultimately vary, depending on the specific buyer and/or terms of the final transaction.
GBS’s in-depth research includes recasting historical financials, building pro forma financials that look five years into the future, and exploring the company’s market position, competitive advantages, intangible assets, corporate strategy, and other differentiating strengths.
CASH FLOW:
Buyers, first and foremost, are buying the right to future cash flow, so current and projected cash flows are critical.
COSTS:
To the extent that cost cutting can be achieved and maintained, doing so will increase cash flow.
RISK:
Buyers want to know how much risk they are taking on, particularly as it relates to the likelihood of the cash flow projections being met. This is where a reasonable projection combined with Salability Factors come in.
BALANCE SHEET:
Accounts Receivable, Accounts Payable, and Inventory Turnarounds impact cash flow and can often be managed more efficiently.
REVENUE:
Usually the easiest way to increase cash flow is to increase revenues.
EXTERNAL FACTORS:
The business owner rarely can influence external factors, but those factors can be watched closely, and the timing of a sale can be arranged accordingly. Some of the factors to consider include the general economy, industry trends, competition, product trends, and industry-specific trends in the M&A marketplace.