Understanding and measuring the value of your business and what drives that value are essential when thinking about selling or merging the company as they also form a foundation from which to truly understand and quantify strategic opportunities and risks.
Ascendant’s process can be broken down into four key steps:
- Define and agree upon how the value of your organization is measured
- Develop an interactive financial model that reflects your business operations and value
- Use the model to define and quantify the value of your organization today (AS IS); identify and understand the key drivers of that value; and establish a baseline against which to evaluate and compare strategic options in the future
- Integrate this value-based framework into your planning efforts to ground the discussions
Using a value-based approach as a means to understanding your strategic options and implications brings additional benefits to your organization, including:
- Helps leadership cut through the subjective discussions around company strategic priorities
- Helps bring greater alignment between ownership and management around company priorities
- Establishes a disciplined planning framework that is focused on protecting and enhancing shareholder value
- Serves as a guide to the strategic foundation of the business and helps protect against value destruction
- Helps ownership and leadership understand the underlying value of the business and how that compares to book value, stock value and market value
- Helps companies to be better prepared and informed in merger
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