- Decoding Working Capital: An Overlooked Factor in M&A Transactions
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- When selling a business, the price that a buyer is willing to pay includes all of the assets and certain liabilities of the company, including machinery and equipment, customer and supplier contracts, lease agreements, and goodwill. The purchase price also includes a certain level of working capital required to operate the business. This is why working capital analysis is a key value component and piece of financial due diligence when selling a business. Business owners typically keep a close eye on working capital during normal operations, and during a sale process, it is no less important to monitor trends to avoid unwanted adjustments to the purchase price. In this article, we will discuss how to analyze historical working capital and considerations for M&A transactions.
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Take Assessment Watch Video- The State of Enterprise Resource Planning
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- In this article Sam Gupta reports Enterprise Resource Planning (ERP) wasn’t designed for intelligent agents, dynamic workflows, or machine-driven transactions. Yet those are now becoming the default operating model for modern businesses. As AI capabilities mature, most business models will change materially. This shift is likely to drive the largest disruption CFOs will experience in their careers. Everything is in scope. Web traffic patterns. Interaction models. Transactional workflows. Learn why Sam writes, “There is a very real possibility that ERP, as a category, either disappears entirely or evolves so far that it no longer fits its traditional definition.”
- The Career Development Habit
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- “We are what we repeatedly do. Excellence, then, is not an act but a habit.” -Aristotle As each new year begins, a lot is written on the subject of habits. Habits associated with health and wellness. Habits associated with mental outlook and happiness. And habits associated with greater professional success. Habits really are at the core of excellence in any arena – including career development.
Governance & Controls – structure and controls.
Transaction Recording – systems, transaction processing and closing the books.
Reporting - efficient, timely and accurate information for decision making and meeting compliance requirements.
Accounting
Business Planning - provide the financial roadmap for the company with supporting analytics.
Financial Forecasting - integrate the company’s current performance relative to budget with the real-time business environment.
Investment Analysis - the framework to analyze new opportunities as they present themselves.
Finance
Cash Management - the discipline to ensure cash is available to operate the business normally.
Funding - Planning for and raising funds to meet the needs of the business.
Risk Management – Identification and mitigation of key business risks.
Treasury
Self-Awareness - Internal.
Team Building - External.
Strategy & Culture – Motivate people to follow you.
Leadership
Four Pillars of Executive Expertise
CFO.University is built around the Four Pillars of CFO Success. These Pillars are supported with Core Competencies. Our framework allows you to master your role as a senior financial officer. The Four Pillars are made up of:
Accounting – Governance & Controls, Transaction Recording and Reporting
Finance – Business Planning, Financial Forecasting and Investment Analysis
Treasury – Cash Management, Funding (Capital Raising) and Risk Management
Leadership – Self Awareness, Team Building and Strategy & Culture
