By: Wesley Legg Many companies tout their differentiation and innovation, yet the clearest way to determine if this actually exists is by evaluating a business’ relative margins. Having higher margins than the industry average usually denotes a competitive advantage, like having low cost advantage or having pricing power because of a brand. Having above average…
By: Zane Tarence When selling a company or seeking investment, there is no larger deterrent to a premium valuation and a smooth closing than messy financials. For growth companies running at full speed, maintaining accurate and up to date financial statements can easily slip to the bottom of the task list. While it is a…
By: Billy Pritchard & Tate Fowler Once full-year data is officially aggregated and reported, it will be no surprise that 2022 will be viewed as a down year for M&A activity across all industries, with private software transactions declining significantly. During the first three quarters of 2022 756 SaaS M&A transactions closed, a ~17% reduction…
By: Wesley Legg In founder or family-owned businesses, it is common for owners to run personal/non-company related revenue or expenses through the business or to expense certain items that would normally be capitalized. While these practices may come in handy during tax season, they can seriously impact a company’s valuation. If you are a business…
By: Duane Donner The value of a business depends on its ability to generate and sustain returns on invested capital (“ROIC”) and the capacity of the business to grow over time. Therefore, understanding and predicting what drives and sustains ROIC is critical to evaluating investments and business strategies. The ROIC of any company or industry…
By: Wesley Legg A lot of emphasis is put on having the right strategy in business. Strategy is important, but I wonder if we spend too much time talking about vision and fresh ideas and not near enough time on good ole fashion execution. Sun Tzu, author of The Art of War wrote, “Weak leadership will…