题目内容

If the target firm’s ratio of bad debt reserves as a percent of projected revenue is decreasing, the analyst should be concerned that projected net revenues could be higher than would actually be realized due to inadequate future reserves for probable uncollectable accounts.

查看答案

搜索结果不匹配？点我反馈

更多问题

The output of M&A models is only as good as the accuracy and timeliness of the numbers that are used to create the model and the quality of the assumptions used in making the projections.

When the target firm is an operating division of a larger firm, it is common for the parent to provide services to the target at below market prices. In calculating the target's standalone value, it is necessary to subtract the difference between the market price of these services and actual cost paid to the parent from the target firm's net income.

Projecting as many of the key income, cash flow, and balance sheet components as a percent of projected revenue helps to ensure the internal consistency of the model.

Common size financial statements are useful for comparing businesses of different sizes in the same industry at different points in time.