A Robust Financial Model

The secret to a smooth transaction process

A robust and flexible financial model can be the difference between a successful transaction process and a painful drawn out one.

A high-quality model will assist you in effective decision making, whether it be assessing the impact of a new venture or transaction, ongoing monitoring of business performance or post investment review.

Standing The Test of a Transaction

A well-constructed financial model, built by specialists well-versed in best practice, provides a level of quality and flexibility that will stand up to the rigour of a transaction. In order to ensure a smooth transaction process, it is imperative that the financial model used:

  • Reflects the nuances of your business - good models stem from sufficiently detailed assumptions which capture the key operational drivers of your business, without becoming cumbersome for an investor to sensitise
  • Presents integrated financial statements – integration is fundamental for a robust model as it ensures sensitivities are accurately captured throughout all three financial statements (Profit and Loss, Balance Sheet and Cashflow), generally at a monthly level
  • Seamlessly updates for actuals - transactional models require the ability to effortlessly roll forward the initial forecast date, accommodating changing timelines in a deal
  • Separates inputs for easy sensitisation – inputs, outputs and calculations should be kept separate on the model to avoid accidental amendments when trying to sensitise

Supporting Your Success

A professionally built model not only demonstrates flexibility in the face of transactional challenges, but also contributes to your success in achieving your business goals in the following ways:

  • Key Insights - tailored dashboards and visualisations within the model can bring your business to life, supporting effective communication with stakeholders who may have differing levels of financial literacy
  • Sensitivity and scenario analysis – the ability to assess multiple scenarios quickly and effectively can help address ‘what if’ questions you may face and assess key areas of risk
  • Familiar format – presenting information in a format suitable for banks, investors and other stakeholders will create confidence from the outset
  • Framework for ongoing monitoring – well-designed models can effectively showcase cash projections or compliance with finance covenants. This enables easy identification of potential future stress points

Transaction Readiness

Whilst many models are built from the catalyst of a transaction, it is such a shame when this is all they are used for. In fact, a good foundation for a smoother transaction is often a reliable and robust financial model that can be used and developed in the lead up to a transaction. This gives management time to get comfortable with the model and familiar with the functionality before the transaction pressure arrives.

Future proofing of models is also a key aspect of our offering - we look to create a deep understanding of your business, including getting significant input from your teams, so that we can build a model that can be used by management going forward. We find that this additional thought is tremendously valued by our clients, giving them a trusted model they can rely on, with functionality to make the model as adaptive as their businesses are.

Contact Us

If you would like to explore how our bespoke models could support your business and its next steps, please get in touch with Janie Reid.

Key Contact

Janie Reid

Janie Reid

Deal Advisory Partner - M&A
Head of Model Build
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