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Financial Modelling. Considering buying a business? All to often a business is bought on the basis of what appears to be a viable proposition. However when performing a detailed analysis of the transactions of the business it is possible to perform "what if" analysis. The "what if" analysis allows you to view the impact on the business if conditions change, some examples: Sales to a customer or product group were reduced. Margins on products were reduced due to new competitors. Costs of products/ services /employees increased/decreased. Impact of capital spending on the business cash.
We will also perform "Due Diligence". Considering selling your business? A key to selling a business is like selling a motor vehicle or house, presentation!. Demonstrating to a potential buyer that the business is viable and has potential is critical. We can use your business records and create a model for your business allowing the potential buyer to perform "what if "analysis. Considering introducing New Products into your manufacturing cycle or are you aware of the true cost of your manufactured products are ? Traditionally costs
that are often thought of as “overheads” can represent a large proportion of
an organisation’s expenses. If these costs are arbitrarily allocated to
satisfy accounting requirements, poor management decisions can result. Activity Based Costing (ABC) is a method that recognises that your products, services, distribution channels and customers create the demand for activities to be performed. It is these activities that cause expenditure of resources. By tracing the link between activity and resource expenditure, and then identifying the demand that each product, service, distribution channel or customer segment has on each activity, the true cost drivers of your “overheads” can be identified and tracked. ABC studies have often uncovered cost distortions that dramatically affect the analysis of
product and customer profitability. To mention just one such example, the management of Diamant Boart were shocked when an ABC analysis showed that a major customer who contributed 6%-7% of total revenues was in fact quite unprofitable… The sales force (who were paid commissions on sales rather than profits!) were reluctant
to consider the expensive services provided especially for the customer as a
cost directly related to that customer. Although buried as “overheads”,
these costs were uncovered by the ABC study. Although ABC has its origins in the manufacturing industry, it has proven to be of enormous benefit to service industries, from health care funds to telecommunications and energy providers
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