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M&A Blog #19 – valuation (Leveraged Buy Out - LBO)

Francine Way

The major steps of LBO are: Building the Sources and Uses tables. Building a proforma balance sheet. Building a historical 3-statement model and a debt-interest schedule. Building the go-forward 3-statement model. Building the go-forward debt-interest schedule. Modeling the future exit.

Valuation 130
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7 Things I Learned from Lana Coronado - Author and Chair for MBH who have acquired 25 companies in less than 2 years.

How2Exit

This can be achieved by following certain steps, such as understanding the market, preparing for a sale, and understanding the legal aspects of the transaction. Additionally, it is important to understand the value of the business and the factors that may affect the sale price. Concept 3: Network to build relationships.

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13 Concepts We Can Learn About Winning and Losing in Entrepreneurship on How2Exit's Interview W/Scott Duke

How2Exit

The impact of higher interest rates is felt in the form of debt servicing ratios. This is the amount of debt that a business can take on in order to finance an acquisition. When interest rates increase, banks are less likely to provide financing as the debt servicing ratio becomes more difficult to meet.

Sale 130
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M&A Blog #16 – valuation (Discounted Cash Flow)

Francine Way

Build proforma income statement and balance sheet. Calculate cost of debt, cost of equity, and weighted average cost of capital (WACC). An example of this would be to state COGS and SGA as percentages of Sales Revenues, or to state Depreciation Expense as a percent of Plant, Property, and Equipment (PPE).

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Guiding Entrepreneurs: David Barnett's Comprehensive Approach to Buying and Selling Businesses

How2Exit

Starting from childhood enterprises to careers in sales and a formal education in business school, Barnett has accumulated a wealth of experience that led him to own a business broker office for several years before venturing into banking.

Business 130
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Business Sale: Prepare to Show Your Financials

IBG

In most business sales, the purchase price is largely based on some multiple of the subject company’s net revenues and adjusted earning capacity. Strengthen your ratios: working capital, debt-to-equity, “quick,” price-to-earnings, return on equity, etc.

Sale 52
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Trial Balance

Wall Street Mojo

It may also be stated as a statement of the total debit and credit balances extracted from the various accounts in the ledger to examine the mathematical exactness of the books. At the end of every accounting period the accounting books are to be closed and preparing the trial balance is the first step towards it.