Strategic Advisory Services

Initial Assessment

FirmKey’s network advisors offer sellers an initial assessment which typically takes 2-4 weeks and includes an analysis of the organizations financial statements, accounting processes, and overall financial health. Based on their findings, advisors in FirmKey’s network deliver an action plan to sellers that recommends the optimal next steps for the organization to prepare to go-to-market.

Remediation

Not only does the initial assessment include what needs to be corrected before going to market, but how to fix it. Advisors offer remediation based on their findings in the initial assessment which typically includes historical cleanups, system optimization, SOP refinement, and cash to accrual reporting.

• Verified, defensible numbers: confirming your financial records are accurate and complete before they’re tested
• Risks surfaced early: identifying the issues that erode value or stall a deal, while there’s still time to fix them
• A clear view of value: assessing the financial health, risks, and true value of the business on the table

Whether you’re on the buy-side or sell-side, that’s the difference between a deal that closes smoothly and one that falls apart in diligence.

Financial Statements Review

The foundation of financial due diligence lies in the meticulous review of historical and current financial statements. This includes scrutinizing income statements, balance sheets, cash flow statements, and statements of equity.

Accounting Policies Assessment

Consistency and compliance with accounting policies are vital for accurate financial reporting. Our strategy consulting services team evaluates the accounting methods used by the target company to prepare its financial statements.

Financial Performance Analysis

Analyzing key financial metrics, ratios, trends, and performance indicators provides insights into a company’s profitability, liquidity, solvency, and financial stability.

Assets and Liabilities Examination

A thorough examination of assets, liabilities, and contingent liabilities is crucial. This includes evaluating the nature, value, ownership, and condition of assets like inventory, receivables, property, plant, equipment, debt, and obligations.

Revenue Recognition Review

Scrutinizing revenue recognition policies, practices, contracts, and transactions ensures compliance with accounting standards and regulations.

Expenses and Costs Review

Identifying areas of efficiency, effectiveness, and potential cost savings or risks is essential. Our advisory services include a detailed review of expenses, costs, and overheads.

Taxation Assessment

Tax compliance, exposures, liabilities, incentives, provisions, and strategies are critical issues in financial due diligence. Our strategy consulting services help assess various tax aspects, including income taxes, sales taxes, property taxes, and transfer pricing.

Legal and Regulatory Compliance

Identifying legal, regulatory, compliance, and governance issues that may impact the company’s financial performance, operations, or reputation is vital.

Key Areas of Quality of Earnings

• Revenue Recognition and Expense Classification: Ensuring consistency and compliance with accounting standards.
• Non-Recurring Items and Adjustments: Identifying items that may distort the company’s financial performance.
• Cash Flow Analysis: Assessing the sustainability of cash flows to support future growth.

Financial Preparedness

Conducting thorough financial due diligence to assess the company’s financial health, performance, liabilities, assets, cash flow, and valuation is the first step in M&A readiness.

Operational Readiness

Evaluating the operational capabilities, systems, processes, and infrastructure of the company helps identify potential integration challenges and opportunities for improvement.

Post-Transaction Integration Support

Supporting the integration plan systematically and efficiently focuses on key areas such as organizational structure, IT systems integration, workforce integration, and synergy realization.

Financial Preparation

Ensuring financial statements, including audited financials for several years, are accurate, transparent, and compliant with regulatory standards like GAAP is crucial.

Corporate Governance and Compliance

Composing a strong, independent board of directors with relevant expertise and experience provides oversight and guidance. Implementing effective risk management practices helps identify, assess, and mitigate potential risks.

Operational Readiness

Streamlining and optimizing business processes improves operational efficiency and scalability, essential for successful IPO readiness.

Market Positioning and Strategy

Conducting thorough market analysis helps understand industry trends, competitive landscape, and market dynamics. Articulating the company’s unique value proposition and competitive advantage to potential investors is critical.

Timing and Market Conditions

Evaluating market conditions and timing for the IPO, considering factors like overall market sentiment, industry trends, and investor appetite for IPOs, is critical.

Valuation Analysis

Determining the company’s fair value and its securities involves assessing various valuation methodologies like discounted cash flow (DCF) analysis, comparable company analysis, and precedent transactions analysis.

Investor Relations Management

Managing investor relations during the capital raise process involves preparing investor presentations, financial disclosures, and other materials to communicate the investment thesis and value proposition effectively.

Due Diligence Support

Leading or supporting the due diligence process ensures the company’s financial records, operations, and projections are thoroughly reviewed and validated by potential investors.

Deal Structuring Insights

Providing valuable insights into deal structuring and negotiation helps optimize the capital raise terms, maximizing value for the company and its shareholders.