The short answer to this question is yes, and let us explain why.
For you to fully understand a business you’re looking to sell, and more importantly to demonstrate the potential of that business to an acquiring entity, you will need to construct a set of integrated financial forecasts which essentially shows the acquirer how their investment is going to grow, and also what the key drivers for that growth will be.
These financial forecasts will include a profit and loss account, balance sheet and cash flow forecast that will usually cover a three year period at monthly rests.
This will be a key document in the process in that it will be interrogated thoroughly by any potential buyer upon reaching due diligence stage, so getting it right is key to making the sale.
The numbers generated will also be presented in summary form in an Information Memorandum to be provided to interested parties.
How should my cash flow projections look?
There are many styles to laying out your projections, but take it from a team who has been there and done it multiple times.
Download our free cash flow projection template below and if you have any questions on them at all, just ask!