Deal Evaluation: 10 Failure Modes

Investors can easily get caught up in the excitement of an upswing. But before jumping into a deal head first, it’s imperative to exert a thorough evaluation of company finances, market changes, and execution details.

In this article, originally published by Financier Worldwide, Todd Anderson and David Fishman of Strategic Decisions Group discuss the 10 common deal evaluation mistakes that surface time and again. These errors include:

  • Assessing technological changes—when might a newer and better solution eclipse the current solution?
  • Applying uniform discounts to financial projections—have you adjusted underlying inputs to determine the overall variability in earnings and cash flow?
  • Identifying a clear exit plan—is long-term value being sacrificed in favor of a steady stream of earnings and cash flow?

SDG has significant experience in banking, insurance, mutual funds, asset management, and related financial industries. Our consultants help financial institutions around the world with business strategy decision-making, asset portfolio management, and risk analysis.