Gather company and transaction data

In many cases (due diligence, valuation of a business, starting as an Operating Officer in a new business) it is important to get to know the business. This is the starting point.

See the complete process in the post below:

Calculating the value of an acquisition

Gather the information with the help of preliminary checklist to establish a groundwork on which the base the additional details to be obtained that are relevant to the valuation assignment.

Review various sources of information. These could include internal and external sources of information as listed below:

Internal source

External source

Sales and Purchase Agreement (SPA) dated January 1, 2017 between Fortune Inc. and M&P Company

Information available on databases such as Standard and Poor’s Capital IQ and KtMine royalty database.

Historical financial statements of M&P for the years ended December 31, 2012 and December 31, 2017. and Balance sheet of M&P as at the valuation date

Publications such as Duff & Phelps 2016/2017/2018/2019 Handbook- Guide to cost of capital and Duff & Phelps 2016/2017/2018/2019 Valuation Handbook – Industry cost of capital (December quarterly update)

Projection of operations for the years ending December 31, 2017 through December 31, 2021 (“Prospective financial information – PFI”)

Publicly available sources such as the U.S. Federal Reserve and Department of Treasury, Moody’s website, and Bloomberg business week

Detailed breakdown of each component of projections. (“Prospective financial information- PFI”)

List of employees acquired as a part of the transaction along with their compensation details and estimates of their replacement costs.

Discussion with key management personnel