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Financial analysis before selling or buying a company
Quality of EBITDA, normalisation, working capital and net debt — computed from source data, not the seller’s deck. On the buy side: what this company really earns and how much of it stays. On the sell side: what the buyer will find and how to prepare the numbers before they are challenged.
When it makes sense
- You are buying a company or a block of shares and want to know what is in the numbers before paying for full due diligence.
- You are selling and want the buyer to find nothing you do not already know.
- A partner is leaving, a minority investor is coming in, a family succession — a number both sides accept is needed.
- You received an offer and cannot tell whether it is good — because you do not know what “EBITDA” means in it.
How I work
- 1Source data from three yearsStatements (XML from the registry), trial balances, ledger export, sales register by client, material contracts, debt and leases. The seller’s information materials I read last — as a hypothesis to test, not as a source.
- 2Quality of EBITDA and normalisationEBITDA broken down by client and month: recurrence, concentration, seasonality. Every adjustment with a number, an amount and a document: owner pay versus market, one-offs, related-party transactions, private costs. Separately, the list of adjustments I do not accept — and why.
- 3Working capital and debt — the bridge to equityNormal working capital from twelve monthly balance sheets, adjusted for seasonality. Net debt and the full list of debt-like items: leases, declared dividends, disputes, arrears, severance, investment commitments. Result: the bridge from enterprise value to equity value, item by item.
- 4A model with sensitivityA three-method valuation and sensitivity tables: what losing the largest client, a two-point margin drop or a different multiple does to the price. For the buyer — a scenario with synergies and group leverage after the deal.
- 5A document for the tableA report with findings ranked by impact on price, a negotiation model (changing an assumption recalculates everything) and — for the seller — a data pack that will withstand due diligence. I work alongside a transaction adviser and lawyers; I do not run the sale process myself.
What you get
- A quality-of-EBITDA report with the list of adjustments (accepted, debatable, rejected) and a document for each.
- The EV → equity bridge item by item, with normal working capital.
- A valuation model with sensitivity — for the negotiation, not the drawer.
- Findings ranked by price impact and a recommendation: what to negotiate, what to fix before the process, what to let go.
Frequently asked questions
How does it differ from due diligence?
In scope and timing. Full financial due diligence happens after the letter of intent, with access to everything, a team and a matching budget. Pre-transaction analysis answers whether it is worth getting to that stage at all — and with what opening price. Often it is what decides that due diligence is unnecessary because there will be no deal.
How long does it take?
Two to three weeks from complete data on the buy side; usually longer on the sell side, because preparing the pack and improving reporting come on top. Waiting for data takes longest — which is why I send the list on day one.
Do you run the sale or find buyers?
No — that is the role of a transaction adviser, with whom I cooperate. My part is the numbers: analysis, valuation, model, data pack and presence at the table as the person who knows where every item came from.
Which EBITDA adjustments do buyers usually accept?
Documented, one-off and unrelated to operations: severance, a settled dispute, a private cost run through the company, owner pay above market. They reject “costs that will not exist after the deal” without proof, and revenue adjustments. Details in the article on EBITDA normalisation.
Let’s talk about your situation
Write a few sentences about the company and the problem. I reply within two working days and the first conversation is free.
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