M&A: Prepare a Financial Presentation

As a potential Seller, your business certainly has accounting records, or you wouldn’t be seriously considering a sale of your business. It would be almost impossible to sell a business without accounting records.  So, if you want to sell but don’t have accounting records, hire a bookkeeper and possibly an accountant and prepare those for the past three fiscal years. 

If you have accounting records, that’s a good thing, but you want to “curate” what you show a potential Buyer and when.  You don’t want to show all the boring details right up front.  What you want to assemble are summary income statements for the past three fiscal years, summary projected income statement for the current year, and summary projected income statements for the three future years.  They will, of course, request detailed financial statements as part of their due diligence, but that comes later, once you have signed a letter of intent (“LOI”) with the Buyer.  Summary income statements include the major categories of revenues and expenses, but not all the subcategories and specific revenues and expenses.  And a current summary balance sheet will likewise only include major categories of assets and liabilities, as shown in the sample below.

Although this can seem straightforward and simple, we know from experience that most business owners specialize in running their businesses and not preparing financials.  Fortunately, we at Traversi & Company specialize in working with our clients to ensure they are ready in every material way for a capital event, including presenting their financials. 

Traversi & Company is a premier sell-side M&A advisory firm - a boutique investment bank - serving the lower middle market. Visit us here.