Prep Financials

M&A Process Flow Chart: Prep Financials

The first step after the seller has determined that it’s time to sell the business, is to prepare the financials. 

These financials are used in the summary package called CIM (short for Confidential Information Memorandum) that goes out to prospective buyers. And, during Due Diligence, additional financial information needs to be provided to the potential buyers. 

Listed below are the minimum key financial statement items you will need to prepare if the business doesn’t have one already. :

1. Last 5 years of P&L (income statement)

2. Last Twelve Months (LTM) P&L or Year-to-Date (YTD) P&L

3. Last 5 years of Balance Sheet 

4. 5 year Forecast (including capital expenditure and working capital)

Go here for more step-by-step and to download the template.

Seller: Determine Selling Price

Seller: Prepare CIM

Seller: Identify Potential Buyers

Buyer: Strategic Rationale to Acquire

Buyer: Financing Options to Acquire

Buyer: Scan for Acquisition Targets

Buyer: Value the Potential Target

Buyer: Make an Offer

Enter Negotiations

Sign LOI Term Sheet

Due Diligence

Buyer: Lock In Financing Need

Sign Definitive Agreement

Release Escrow

Transition Period

Business Ideas & Inspiration

Marketing & Sales Support

Old Archives of Public Company Analysis Examples >>