Financial Analysis

Financial Analysis

📊 DealStreetDynamics Financial Analysis Report

1. Historical Financials (3–5 Years)

  • Income Statement, Balance Sheet, and Cash Flow

  • Year-over-year growth rates

  • EBITDA and discretionary earnings normalization

  • Visuals: trend charts, margin breakdowns, revenue mix

2. Industry Benchmarking

  • Compare key ratios to Robert Morris Associates (RMA) Financial Statement Studies:

    • Gross margin, net margin, current ratio, debt-to-equity, inventory turnover

  • Highlight overperformance and underperformance zones

  • Include percentile rankings and industry averages

3. Valuation Summary (Top 4 Methods)

4. Deal Rationale

This section explains why the business is attractive from a buyer’s perspective. It highlights strategic advantages, growth potential, and any unique leverage points that make the deal compelling.

  • Strong recurring revenue or customer retention

  • Undervalued assets or untapped channels

  • Operational inefficiencies that can be optimized post-acquisition

  • Strategic fit with buyer’s existing portfolio or capabilities

5. Risk Factors

A transparent look at potential red flags or areas that require due diligence. This builds trust and positions the buyer as informed and proactive.

  • Customer concentration or supplier dependency

  • Regulatory or licensing issues

  • Declining margins or inconsistent cash flow

  • Owner dependency or lack of documented processes

6. Upside Opportunities

This is where you flip the risks into growth narratives. It’s your chance to show how a savvy buyer could unlock value.

  • Expand into adjacent markets or geographies

  • Digitize operations or improve marketing

  • Introduce new pricing models or product lines

  • Streamline costs through automation or outsourcing

7. Transition Plan

Outline how the handoff could work. This reduces buyer anxiety and shows you’ve thought through the post-close reality.

  • Owner willing to stay on for X months of training

  • Key staff retained and incentivized

  • SOPs and documentation available

  • Clean books and systems ready for transfer

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Method Description Value Range
Asset-Based Net tangible assets adjusted for market value $X–$Y
Income-Based (DCF) Discounted future cash flows $X–$Y
Market-Based Comparable sales multiples (SDE, EBITDA) $X–$Y
Rule of Thumb Industry-specific heuristics $X–$Y