{"id":2383,"date":"2022-01-17T11:19:12","date_gmt":"2022-01-17T16:19:12","guid":{"rendered":"http:\/\/35.227.21.112\/?page_id=2383"},"modified":"2023-01-19T10:14:35","modified_gmt":"2023-01-19T15:14:35","slug":"due-diligence-and-valuation","status":"publish","type":"page","link":"https:\/\/lions.financial\/hi\/due-diligence-and-valuation\/","title":{"rendered":"Due Diligence and Valuation"},"content":{"rendered":"\t\t
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Due Diligence and Valuation<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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During the due diligence and valuation process, Lions Financial helps clients create the comprehensive plan and business valuation based on the company’s unique character. Lions Financial can provide you with a holistic solution to create value during the investment underwriting period.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Our expertise<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Due diligence and valuation of a company is part of an examination that provides a reasonable investigation on important matters and qualifies a business’s financial value. It helps to have a holistic approach when determining the metrics that are being utilized in understanding business and financial components in important transactions like Mergers and Acquisitions. When a purchasing company uses data to make decisions on the potential investment risk, the true value of the business needs to be thoroughly underwritten. A proper decision is difficult to be made without uncertainty if there isn’t thorough due diligence and confidence in the valuation, which are essential to determine whether the business price is suitable.<\/p><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The Key Items to Know in Due Diligence and Valuation Process\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tNet worth \t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tDetermining a company's net worth is one of the most important factors to take care of when selling or purchasing a company. It is possible to get an accurate estimate of what one's company may be worth or aid in the evaluation stage of purchasing a company. \t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tAsset Valuation\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tAsset Valuation is the summing up of the company\u2019s tangible and intangible items. Things such as equipment, inventory, real estate, stocks, patents, and trademarks should all be considered in this valuation. It is wise to use the book market value of these items to determine their worth, though accounting for possible depreciation due to usage is also a factor.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tHistorical Earnings Valuation\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tThe business\u2019s gross income, along with its ability to repay debt and capitalization of cash flow or earnings, determines its current value. Should the company fail to bring in new or repeat business, the value of the company will drop when it is low enough that the company is unable to make payments on its bills.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tRelative Valuation\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tWith this method, you would look at the business within the same sector, in the same range of net worth, and see how much they are selling for. While this may be inaccurate due to possible issues found during the discovery process of a purchaser, it gives a somewhat ballpark figure to base your personal estimate off of, which is used as more of a guideline rather than an actual estimate. This method is unlike the others and is meant to be used in conjunction with other valuation tactics.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tFuture Maintainable Valuation\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tFuture maintainable is the idea that the business's profitability in the future will determine its value in the current day. This method is used mainly when profits are expected to remain stable, but if a company fluctuates heavily, then it may not be the best decision to use this. To calculate this, evaluate sales, expenses, profits and gross profits from the past three years to create a forward projection using averages and conduct a standard trend analysis.\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tDiscount Cash flow valuation\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tWhen profits are not projected to remain stable for the foreseeable future, it is prudent to use the discount cash flow valuation method. This makes your business\u2019s future net cash flows and discounts them back to present-day values. Using these figures, you can find the future net worth of the business, along with how much money your current\/future assets will attain in the future.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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What Is The Work-Process Lions Financial Uses?<\/h4>
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A Closed-Loop, Value-Focused, Four-Step SIRE\u00a9 Work-Process For Each Of Our Services:<\/h2>
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\n\t\t\t\t\t\tStep 1: Survey\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tWe will begin the process with a questionnaire to have a general understanding of your business and identify the unique composition of critical factors for the transaction. We clarify your business objectives and gain understanding of the unique current issues that need to be addressed.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tStep 2: Insight\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tTo have a deep insight into your specific business, we will incorporate industry research, determine product offerings available from many sources, create an assessment for reasonable factors to consider for individual business evaluation.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tStep 3: Recommend\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tThen, we will develop Due Diligence solutions tailored to the Risks associated with your company completing upcoming transactions. We also will provide different formal formats of accepted business valuation metrics.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\tStep 4: Execute\t\t\t\t\t<\/h3>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\tWe will implement the strategy with your company during Due Diligence regarding elements that need to be corrected executed based on Risk factors and business expectations. We help complete business valuation assessments and achieve a better result with our professional experience, technology integration, understanding of your industry, and staying attuned to the compliance and regulatory requirements.\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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A Due Diligence and Valuation Process Checklist:\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t1-page Due Diligence and Valuation Report:\n<\/b>
  • 10- to 12-paragraph Market Data topline. \n<\/b><\/li>
  • Example:\nDescription of EBITDA & NPAT, current and full processing capacity, power security contracts, production & development<\/b>\n<\/li>
  • 2-page Company Presentation\n<\/b><\/li>
  • 4- to 6-paragraph Executive Summary expansion of Summary,\n<\/b><\/li>
  • 4- to 6-paragraph Portfolio Premiums. <\/b>

    <\/p>\n\nExample:\n<\/b><\/li>

  • Exploration success\n<\/b><\/li>
  • Current reserves with table showing Comparison Summary\n<\/b><\/li>
  • Graph showing Analysis of Reserve and <\/b><\/li>
  • Resource Replacement Ratios\n<\/b><\/li>
  • Experience and qualifications of team members -CEO, CFO, COO\n\n<\/b>

    Profitability Profile<\/b><\/p>\nExploration potential in other assets:\n<\/b><\/li>

  • 2-paragraph Portfolio Risks\n<\/b><\/li>
  • Commodity price risk and exchange rate risk\n<\/b><\/li>
  • Single largest risk\n<\/b><\/li>
  • 2-paragraph Corporate Strategy.\n<\/b><\/li>
  • News summary last 3 to 4 years\n<\/b><\/li>
  • One Page Listing Information\n<\/b><\/li>
  • 1-paragraph on prior mergers & acquisitions, with dates\n<\/b><\/li>
  • Management and Governance table\n<\/b><\/li>
  • Assets & Projects, and Cash Flows\n<\/b><\/li>
  • Technologies & Markets\n<\/b><\/li>
  • Valuation, Revenue Estimations and Analyst Certifications<\/b><\/li><\/b>\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tWhat\u2019s Next? >><\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \u00a0 \u00a0 \u00a0 Find Out More About Due Diligence and Valuation >><\/b><\/h2>