PRE-VALUATION QUESTIONNAIRE

Transcription

1 PRE-VALUATION QUESTIONNAIRE BUSINESS NAME: LEGAL ENTITY NAME: BUSINESS COMMENCEMENT DATE: COMPLETED BY: VALUATION DATE: LAST FINANCIAL YEAR END DATE: DATE QUESTIONNAIRE COMPLETED: HISTORICAL PERIOD UNDER REVIEW LAST 5 YEARS 3 YEARS 2 YEARS 1 YEAR PURPOSE OF THIS QUESTIONNAIRE TO UNDERSTAND THE BUSINESS MODEL TO OBTAIN CONFIRMATION THAT THE BUSINESS MODEL IS SUSTAINABLE TO OBTAIN DATA TO BE USED IN ONLINEBIZVALUATIONS INPUT SHEET YES NO Q1. GOIN CONCERN IS THE BUSINESS A GOING CONCERN? Note: Refer to definition of going concern Q2. CORE BUSINESS OPERATIONS DOES THE CORE BUSINESS OPERATIONS OF THE BUSINESS / LEGAL ENTITY CONSIST OF: a) SINGLE CORE BUSINESS OPERATION? or b) MULTIPLE CORE BUSINESS OPERATIONS? Note: If multiple core operations, complete this questionnaire for each core operation Q3. PRODUCTIVE ASSETS OF ENTERPRISE (VALUE PLATFORM) 3.1 DOES THE BUSINESS HAVE PRODUCTIVE TANGIBLE ASSETS? Productive tangible assets are the physical resources such as plant and machinery that generates revenues and earnings 3.2 DOES THE BUSINESS HAVE PRODUCTIVE INTANGIBLE ASSETS? Productive intangible assets are the intellectual property assets such as patents, copyright, trademarks and franchise rights that generates revenues and earnings Q4. HISTORICAL GROWTH HAS THE BUSINESS SHOWN GOOD GROWTH (AFTER INFLATION) OVER THE LAST 3 TO 5 YEARS IN RESPECT OF: a) SALES b) GROSS PROFIT c) NET PROFIT AFTER TAX d) TOTAL ASSETS e) NET WORKING CAPITAL f) NET WORTH (NET ASSET VALUE) g) LIQUID CASH RESOURCES 1

2 YES NO Q5. BALANCE SHEET (FINANCIAL POSITION STATEMENT) DOES THE BUSINESS HAVE A STRONG BALANCE SHEET? Consider: Solvency : Total FMV > Total FMV Liquidity: Quick Assets > Current Liabilities Gearing: Equity > Debt Q6. INCOME STATEMENT DOES THE BUSINESS HAVE A STRONG INCOME STATEMENT? Consider: Growth in Sales and Earnings (NPAT) Margin: Gross Profit % : Operating Profit % (EBITDA %), Net Margin % (NPAT) Q7. NORMALISED EARNINGS AND EXTRANEOUS EARNINGS DOES THE HISTORICAL INCOME STATEMENT : a) REFLECT A NORMALISED EARNINGS PERFORMANCE? b) EXTRANEOUS REVENUE AND EARNINGS? Consider: Normalisation is required when revenues and costs are either understated or over-stated due to transactions not at arms length, omissions such as free rental, and executive / member salaries omitted or below the going rate for the job. Extraneous revenue and expenses arises out of once-off transactions or events that are abnormal or windfall gains, that is unlikely to repeat in the foreseeable future. For example : World Cup Soccer transactions Q8. FUTURE PROSPECTS AND FUTURE REVENUE STREAMS ON THE BASIS OF THE BUSINESS BEING A GOING CONCERN, WHAT ARE THE FUTURE PROSPECTS FOR THE BUSINESS? a) CONSTANT AND STEADY GROWTH IN SALES, EARNINGS AND CASH FLOW FROM OPERATIONS (AFTER INFLATION)?, or b) FLUCTUATING AND VOLATILE GROWTH IN SALES, EARNINGS AND CASH FLOWS FROM OPERATIONS (AFTER INFLATION)? Q9. FORECAST PERIOD BASED ON THE NATURE OF THE BUSINESS MODEL (INCLUDING THE CONDITION AND CAPACITY OF ITS PRODUCTIVE TANGIBLE AND INTANGIBLE ASSETS) AND HISTORICAL FINANCIAL PERFORMANCE OR BECAUSE OF CONTRACTUAL BUSINESS AND CASH FLOW FROM OPERATIONS a) FUTURE REVENUE STREAMS WILL ONLY CONTINUE FOR A DEFINED PERIOD AS THERE IS NO CERTAINTY OF THE CONTRACT BUSINESS BEING RENEWED, or b) FUTURE REVENUE STREAMS WILL CONTINUE IN PERPETUITY Note: In perpetuity means that the business will carry on forever. However, the average economic life of a business is 15 years. 2

3 Q10. SWOT ANALYSIS ACHIEVEMENTS 10.1 WHAT ARE THE MAIN ACHIEVEMENTS OF THE BUSINESS DURING THE LAST 3 YEARS? STRENGTHS 10.2 WHAT ARE THE MAIN STRENGTHS OF THE BUSINESS AT VALUATION DATE? DISAPPOINTMENTS 10.3 WHAT ARE THE MAIN DISAPPOINTMENTS OF THE BUSINESS DURING THE LAST 3 YEARS? WEAKNESSES 10.4 WHAT ARE THE MAIN ADVANTAGES OF THE BUSINESS DURING THE LAST 3 YEARS? CHALLENGES 10.5 WHAT ARE THE MAIN CHALLENGES OR THREATS FACING THE BUSINESS DURING THE NEXT 3 TO 5 YEARS? 3

4 Q11. CRITICAL SUCCESS FACTOR WHAT IS THE SINGLE MOST IMPORTANT CRITICAL SUCCESS FACTOR OF THE BUSINESS THAT WILL INFLUENCE THE FUTURE SUCCESS AND SUSTAINABILITY OF THE BUSINESS? Q12. KEY CUSTOMERS a) WHO ARE THE BUSINESS KEY CUSTOMERS? (Specify Top 5) b) WHAT WOULD BE THE IMPACT ON THE BUSINESS IF ANY OF THESE CUSTOMERS MOVED OVER TO YOUR COMPETITORS, OR CEASED TO OPERATE? Q13. KEY SUPPLIERS AND SUBCONTRACTORS a) WHO ARE THE BUSINESS KEY SUPPLIERS AND SUBCONTRACTORS? (Specify Top 5) b) WHAT WOULD BE THE IMPACT ON THE BUSINESS IF ANY OF THESE SUPPLIERS / SUBCONTRACTORS CEASED TO OPERATE FOR ANY REASON? Q14. KEY MANAGEMENT a) WHO ARE THE BUSINESS KEY EXECUTIVE MANAGEMENT, THEIR SPECIFIC POSITIONS/FUNCTIONS AND CURRENT ANNUAL COST TO THE COMPANY? NAME FUNCTION ANNUAL REMUNERATION 4

5 Q15. COMPETITION WHO ARE THE BUSINESS MAIN COMPETITORS? Q16. COMPETITIVE ADVANTAGES WHAT IS THE BUSINESS COMPETITIVE ADVANTAGES IN RELATION TO ITS COMPETITORS? Q17. VALUE PROPOSITION (UNIQUE SELLING PROPOSITION) WHAT IS THE VALUE PROPOSITION OF THE BUSINESS? Q18. BUSINESS PLAN AND STRATEGY PLAN DOES THE BUSINESS HAVE AN UP-TO-DATE BUSINESS PLAN, STRATEGY PLAN AND SUCCESSION PLAN AT VALUATION DATE? Q19. VALUE DRIVERS DOES THE BUSINESS HAVE THE FOLLOWING VALUE DRIVERS IN PLACE TO DRIVE AND GROW FUTURE ENTERPRISE AND EQUITY VALUE? a) NICHE MARKET PRODUCTS b) CUSTOMER BASE c) LOW COST STRUCTURE d) EMPLOYEE PRODUCTIVITY e) INNOVATION / INVENTIONS f) COMPETITIVE ADVANTAGES g) MANAGEMENT COMPETENCE h) ANNUITY INCOME MODEL i) BRAND LOYALTY j) CORPORATE GOVERNANCE BEST PRACTICES 5

6 Q20. BUSINESS SPECIFIC RISKS RATE THE BUSINESS SPECIFIC RISKS BUSINESS RISK ANALYSIS BUSINESS RISK AREAS INDICATOR YES NO 1. TANGIBLE AND INTANGIBLE PRODUCTIVE ASSETS Are the productive tangible and intangible assets revenue generating? 2. SOLVENT FINANCIAL POSITION Is the business positively solvent? 3. CASH RESOURCES Does the business have positive cash resources and reserves available (liquidity)? 4. GEARING Is the business low geared (low borrowings)? 5. PROFITABILITY : GOOD MARGINS AND EARNINGS Is the business making consistent good profits? GENERATION 6. CASH FLOW FROM OPERATIONS GENERATION Is the business showing consistent positive cash flow from operations? 7. PRODUCT AND SERVICE RANGE Does the business have a range of diversified and quality products? 8. CUSTOMER BASE Does the business have a diversified loyal and growing customer base? 9. SUPPLY BASE Does the business have a diversified solid and reliable supply base? 10. KEY MANAGEMENT AND PERSONNEL Does the business have competent, reliable and loyal management and subordinate personnel? 11. BUSINESS PLAN AND SUCCESSION PLAN Has the business in place a realistic and achievable business plan and succession plan? 12. CORPORATE GOVERNANCE Has the business in place good corporate governance practices, procedures and systems that are operational, ethical and effective? 13. RELIABILITY OF FINANCIAL DATA AND ASSURANCE LEVEL OF ANNUAL FINANCIAL STATEMENTS Is the annual financial statements subject to audit or independent review or neither? 14 RESTRICTIVE LEGISLATION AND REGULATIONS Is the business subject to any critical current or proposed business legislation or regulations that will adversely affect its performance and profitability and on-going sustainability? 15 OTHER (Specify) Q18. BUSINESS CONTINUITY PLAN IN THE EVENT OF A DISASTER OR CATASTROPHE HITTING THE BUSINESS, DOES THE BUSINESS HAVE A BUSINESS CONTINUITY PLAN THAT WILL MINIMISE THE BUSINESS INTERRUPTION? Q19. OTHER PERTINENT INFORMATION Please specify THANK YOU FOR YOUR CO-OPERATION 6

7 PRE-VALUATION QUESTIONNAIRE : SUPPORTING SCHEDULES AT VALUATION DATE PRE-VALUATION QUESTIONNAIRE SUPPORTING SCHEDULE Q1 GOING CONCERN S1 GOING CONCERN TEST Q2 CORE BUSINESS OPERATIONS S2 BUSINESS PROFILE / BUSINESS PROSPECTUS Q3 PRODUCTIVE ASSETS OF ENTERPRISE S3 DETAILED ASSET REGISTER AT FMV AT VALUATION DATE Q4 HISTORICAL GROWTH S4 DETAIL FINANCIAL STATEMENTS (last 3 to 5 years) Q5 BALANCE SHEET POSITION S5 BALANCE SHEET / FINANCIAL POSITION AT VALUATION DATE Q6 INCOME STATEMENT S6 DETAILED INCOME STATEMENT (last 3 to 5 years) Q7 NORMALISED EARNINGS AND EXTRANEOUS S7 NORMALISATION SCHEDULE (if applicable) EARNINGS Q8 FUTURE PROSPECTS S8 OPERATING BUDGET, SALES FORECASTS, MARKET RESEARCH REPORT, CAPEX INVESTMENT FOR FORECAST PERIOD Q9 FORECAST PERIOD S9 FORECAST PERIOD JUSTIFICATION Q10 SWOT ANALYSIS S10 SWOT ANALYSIS REPORT Q11 CRITICAL SUCCESS FACTOR S11 CRITICAL SUCCESS FACTOR STATEMENT Q12 KEY CUSTOMERS S12 KEY CUSTOMERS SCHEDULE Q13 KEY SUPPLIERS AND SUBCONTRACTORS S13 KEY SUPPLIERS SCHEDULE Q14 KEY MANAGEMENT S14 KEY MANAGEMENT SCHEDULE Q15 COMPETITION S15 MAIN COMPETITORS Q16 COMPETITIVE ADVANTAGES S16 COMPETITIVE ADVANTAGES STRATEGY Q17 VALUE PROPOSITION S17 VALUE PROPOSITION STATEMENT Q18 BUSINESS PLAN AND STRATEGY PLAN S18 BUSINESS PLAN AND/OR STRATEGY PLAN AND SUCCESSION PLAN Q19 VALUE DRIVERS S19 VALUE DRIVERS SUPPORTING STATEMENT Q20 BUSINESS SPECIFIC RISKS S20 BUSINESS / COMPANY SPECIFIC RISK RATING Q21 BUSINESS CONTINUITY PLAN S21 BUSINESS CONTINUITY PLAN REPORT Q22 OTHER PERTINENT INFORMATION S22-7