The Data Institute Acquisition Manual

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Volume 2

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ACQUISITION MANUAL for THE TARGET COMPANY

6
Corporate Development
7
Product Management
8
Overseas Development
9
Product Distribution & Service
10
Advertising + P.R.
16
New Technology Primers
17
Physical Process & Orders
18
Competition Analysis
19
Product Perceptions
20
Customer Perceptions
Financial
Industry
Markets
Products
Data Grids
World MDB
Research MDB
Product MDB
Corporate MDB
Reference MDB

Volume
2

 

The Chief Executive's Summary

Concise information on the Acquisition of the Company is provided in this section and is devised to give an incoming Chief Executive all the facts necessary to make the decisions critical for planning post-acquisition strategy.

Historic Financial & Operating results of the company are seen in order that the track record of the Company can be established and recorded.

Important Balance Sheet forecasts of financial and operating data, which represents all the major areas of problems and opportunities which will affect the Company after acquisition, suggest 13 of the most influential strategic scenarios. These scenarios are presented as full Profit and Loss projections.

Each of these strategic scenarios are explored in greater depth in other parts of the Acquisition Manual and this allows the Chief Executive to get a key oversight of the major concerns which will engage the Chief Executive at this stage.

Finally, this part of the manual contains an executive Revenue and Turnover prediction for each of the most important countries and geographic markets in which the Company operates. This Revenue projection is essential for all the financial and operational scenarios given throughout the 20 parts of the manual. Detailed Market forecasts are given in Volumes 4, 5 and 8.

  1. Historic Financial Data for the Company

  2. Base Financial Forecasts for the Company

  3. Financial Forecast Scenarios for Senior Management at the Company

  4. Base Market Forecasts for the Company

  5. World Markets

 

1

Historic Financial Data:

 

 

Financial Comparisons: Historic

 

 

 

 
   

Target Company

 

Base Reference Industry

 
 
 Previous 
 Previous 
 Last Year 

 

 Previous 

 Previous 

 Last Year 

Total Sales
 
$****
$****
$****

 

$****
$****
$****
Domestic Sales
%
 
 
 

 

     
Exports
%
****%
****%
****%

 

****%
****%
****%
Pre-tax Profit
%
****%
****%
****%

 

****%
****%
****%
Interest Paid
%
****%
****%
****%

 

****%
****%
****%
Non-trading Income
%
****%
****%
****%

 

****%
****%
****%
Operating Profit
%
****%
****%
****%

 

****%
****%
****%
Depreciation:   Structures
%
****%
****%
****%

 

****%
****%
****%
Depreciation:   Plant & Equip.
%
****%
****%
****%

 

****%
****%
****%
Depreciation:   Miscellaneous
%
****%
****%
****%

 

****%
****%
****%
Total Depreciation
%
****%
****%
****%

 

****%
****%
****%
Trading Profit
%
****%
****%
****%

 

****%
****%
****%
Intangible Assets
%
****%
****%
****%

 

****%
****%
****%
Intermediate Assets
%
****%
****%
****%

 

****%
****%
****%
Fixed Assets: Structures
%
****%
****%
****%

 

****%
****%
****%
Fixed Assets: Plant & Equip.
%
****%
****%
****%

 

****%
****%
****%
Fixed Assets: Miscellaneous
%
****%
****%
****%

 

****%
****%
****%
Fixed Assets
%
****%
****%
****%

 

****%
****%
****%
Capital Expend. Structures
%
****%
****%
****%

 

****%
****%
****%
Capital Exp. Plant & Equip.
%
****%
****%
****%

 

****%
****%
****%
Capital Expenditure: Vehicles
%
****%
****%
****%

 

****%
****%
****%
Cap. Exp. Data Process Eq.
%
****%
****%
****%

 

****%
****%
****%
Cap. Exp. Misc.Items
%
****%
****%
****%

 

****%
****%
****%
Total Capital Expenditure
%
****%
****%
****%

 

****%
****%
****%
Retirements:  Structures
%
****%
****%
****%

 

****%
****%
****%
Retirements:  Plant and Equip.
%
****%
****%
****%

 

****%
****%
****%
Retirements:  Miscellaneous
%
****%
****%
****%

 

****%
****%
****%
Total Retirements
%
****%
****%
****%

 

****%
****%
****%
Total Fixed Assets
%
****%
****%
****%

 

****%
****%
****%
Finished Product Stocks
%
****%
****%
****%

 

****%
****%
****%
Work in Progress as Stocks
%
****%
****%
****%

 

****%
****%
****%
Materials as Stocks
%
****%
****%
****%

 

****%
****%
****%
Total Stocks / Inventory
%
****%
****%
****%

 

****%
****%
****%
Debtors
%
****%
****%
****%

 

****%
****%
****%
Miscellaneous Current Assets
%
****%
****%
****%

 

****%
****%
****%
Total Current Assets
%
****%
****%
****%

 

****%
****%
****%
Total Assets
%
****%
****%
****%

 

****%
****%
****%
Creditors
%
****%
****%
****%

 

****%
****%
****%
Short Term Loans
%
****%
****%
****%

 

****%
****%
****%
Misc. Current Liabilities
%
****%
****%
****%

 

****%
****%
****%
Total Current Liabilities
%
****%
****%
****%

 

****%
****%
****%
Net Assets/Capital Employed
%
****%
****%
****%

 

****%
****%
****%
Shareholders Funds
%
****%
****%
****%

 

****%
****%
****%
Long Term Loans
%
****%
****%
****%

 

****%
****%
****%
Misc. Long Term Liabilities
%
****%
****%
****%

 

****%
****%
****%
Workers
Unit
 
 
 

 

 
 
 
Hours Worked
Unit
 
 
 

 

 
 
 
Work in 1st Quarter  % p.a.
 
****%
****%
****%

 

****%
****%
****%
Work in 2nd Quarter  % p.a.
 
****%
****%
****%

 

****%
****%
****%
Work in 3rd Quarter  % p.a.
 
****%
****%
****%

 

****%
****%
****%
Work in 4th Quarter  % p.a.
 
****%
****%
****%

 

****%
****%
****%
Total Employees
Unit
 
 
 

 

 
 
 
Raw Materials Cost
%
****%
****%
****%

 

****%
****%
****%
Finished Materials Cost
%
****%
****%
****%

 

****%
****%
****%
Fuel Cost
%
****%
****%
****%

 

****%
****%
****%
Electricity Cost
%
****%
****%
****%

 

****%
****%
****%
Materials/Energy Costs
%
****%
****%
****%

 

****%
****%
****%
Payroll Costs
%
****%
****%
****%

 

****%
****%
****%
Wages
%
****%
****%
****%

 

****%
****%
****%
Directors' Remunerations
%
****%
****%
****%

 

****%
****%
****%
Employee Benefits
%
****%
****%
****%

 

****%
****%
****%
Employee Commissions
%
****%
****%
****%

 

****%
****%
****%
Tot Employees Remuneration
%
****%
****%
****%

 

****%
****%
****%
Sub Contractors
%
****%
****%
****%

 

****%
****%
****%
Rental & Leasing: Structures
%
****%
****%
****%

 

****%
****%
****%
Rental/Leasing: Plant & Equip.
%
****%
****%
****%

 

****%
****%
****%
Total Rental & Leasing Costs
%
****%
****%
****%

 

****%
****%
****%
Maintenance: Structures
%
****%
****%
****%

 

****%
****%
****%
Maintenance: Plant & Equip.
%
****%
****%
****%

 

****%
****%
****%
Total Maintenance Costs
%
****%
****%
****%

 

****%
****%
****%
Services Purchased
%
****%
****%
****%

 

****%
****%
****%
Communications Costs
%
****%
****%
****%

 

****%
****%
****%
Miscellaneous Expenses
%
****%
****%
****%

 

****%
****%
****%
Sales Variable & Commissions
%
****%
****%
****%

 

****%
****%
****%
Sales Expenses and Costs
%
****%
****%
****%

 

****%
****%
****%
Sales Materials Costs
%
****%
****%
****%

 

****%
****%
****%
Total Sales Costs
%
****%
****%
****%

 

****%
****%
****%
Distribution Fixed Costs
%
****%
****%
****%

 

****%
****%
****%
Distribution Variable Costs
%
****%
****%
****%

 

****%
****%
****%
Warehousing Fixed Costs
%
****%
****%
****%

 

****%
****%
****%
Warehousing Variable Costs
%
****%
****%
****%

 

****%
****%
****%
Physical Handling Fixed Costs
%
****%
****%
****%

 

****%
****%
****%
Phy. Handling Variable Costs
%
****%
****%
****%

 

****%
****%
****%
Physical Process Fixed Costs
%
****%
****%
****%

 

****%
****%
****%
Phy. Process Variable Costs
%
****%
****%
****%

 

****%
****%
****%
Total Distribution & Handling
%
****%
****%
****%

 

****%
****%
****%
Mail & Correspondence Costs
%
****%
****%
****%

 

****%
****%
****%
Media Advertising Costs
%
****%
****%
****%

 

****%
****%
****%
Advertising Materials & Print
%
****%
****%
****%

 

****%
****%
****%
POS & Display Costs
%
****%
****%
****%

 

****%
****%
****%
Exhibition & Events Costs
%
****%
****%
****%

 

****%
****%
****%
Total Advertising Costs
%
****%
****%
****%

 

****%
****%
****%
Product Returns & Rejection
%
****%
****%
****%

 

****%
****%
****%
Product Installation Costs
%
****%
****%
****%

 

****%
****%
****%
Product Breakdown Costs
%
****%
****%
****%

 

****%
****%
****%
Product Configuration Costs
%
****%
****%
****%

 

****%
****%
****%
Product Service/Maintenance
%
****%
****%
****%

 

****%
****%
****%
Customer Problem Costs
%
****%
****%
****%

 

****%
****%
****%
Total After-Sales Costs
%
****%
****%
****%

 

****%
****%
****%
Total Marketing Costs
%
****%
****%
****%

 

****%
****%
****%
New Technology Expenditure
%
****%
****%
****%

 

****%
****%
****%
New Product Technology Exp.
%
****%
****%
****%

 

****%
****%
****%
Tot Research & Development
%
****%
****%
****%

 

****%
****%
****%
Total Operational Costs
%
****%
****%
****%

 

****%
****%
****%
Debtors within Agreed Terms
%
****%
****%
****%

 

****%
****%
****%
Debtors Outside Terms
%
****%
****%
****%

 

****%
****%
****%
Un-recoverable Debts
%
****%
****%
****%

 

****%
****%
****%
 
 
 
 
 

 

     

 

 Financial Definitions

 

2

Base Financial Forecasts:

 

The BALANCE SHEET FORECASTS section gives a series of Forecasts for the Company (and the base reference industry) using a number of assumptions relating to the market and economic environment.

  •  Median or Base Macro Economic Growth

  •  Best Macro Economic Growth

  •  Worst Macro Economic Growth

 

Financial Comparisons: Base Macro Economic Forecasts

 

Target Company

Base Reference Industry

 

MEDIAN REVENUE FORECAST: Financials

MEDIAN REVENUE FORECAST: Margins & Ratios

BEST REVENUE FORECAST: Financials

BEST REVENUE FORECAST: Margins & Ratios

WORST REVENUE FORECAST: Financials

WORST REVENUE FORECAST: Margins & Ratios

MEDIAN ECONOMIC FORECAST: Financials

MEDIAN ECONOMIC FORECAST: Margins & Ratios

BEST ECONOMIC FORECAST: Financials

BEST ECONOMIC FORECAST: Margins & Ratios

WORST ECONOMIC FORECAST: Financials

WORST ECONOMIC FORECAST: Margins & Ratios

 Financial Definitions

 

3

Financial Scenarios Forecast for Senior Management:

 

The BUSINESS DECISION SCENARIOS BALANCE SHEET FORECASTS section gives a series of Forecasts for the Company (and the industry comparisons) using a number of assumptions relating to the business decisions available to the senior management of the Company.

The Balance sheet forecast given shows the effects of business improvements which company management are likely to recommend:

BUSINESS DECISION SCENARIOS

  •  Marketing Expenditure

  •  New Product Development

  •  Market Segmentation

  •  New Plant + Equipment Investment

  •  New Technology Investment

  •  Distribution Channel Improvement

  •  Cost Structure Improvement

  •  Price Cutting Effect

  •  Price Increase Effect

  •  Quality Improvement

  •  Export Sales Improvement

  •  Personnel + Staff Improvement

Managers in the Company will, in both the short-term and the long-term, have vital decisions to make regarding the business improvements, margins and profitability and these decisions will need to be evaluated in light of the customers, markets, competitors, products, industry and internal factors. The scenarios given isolate a number of the most important factors and provide balance sheet forecasts for each of the scenarios.

 

Financial Scenarios Comparisons:

 

Target Company

Base Reference Industry

 

THE TARGET COMPANY FORECASTS

MARKETING EXPENDITURE : Financials

MARKETING EXPENDITURE : Margins & Ratios

NEW PRODUCT DEVELOPMENT : Financials

NEW PRODUCT DEVELOPMENT : Margins & Ratios

MARKET SEGMENTATION : Financials

MARKET SEGMENTATION : Margins & Ratios

NEW PLANT + EQUIPMENT Investment: Financials

NEW PLANT + EQUIPMENT Investment: Margins & Ratios

NEW TECHNOLOGY Investment: Financials

NEW TECHNOLOGY Investment: Margins & Ratios

DISTRIBUTION CHANNEL IMPROVEMENT: Financials

DISTRIBUTION CHANNEL IMPROVEMENT: Margins & Ratios

COST STRUCTURE IMPROVEMENT: Financials

COST STRUCTURE IMPROVEMENT: Margins & Ratios

SHORT-TERM PRICE CUTTING EFFECT : Financials

SHORT-TERM PRICE CUTTING EFFECT : Margins & Ratios

SHORT-TERM PRICE INCREASE EFFECT : Financials

SHORT-TERM PRICE INCREASE EFFECT : Margins & Ratios

QUALITY IMPROVEMENT: Financials

QUALITY IMPROVEMENT: Margins & Ratios

EXPORT SALES IMPROVEMENT: Financials

EXPORT SALES IMPROVEMENT: Margins & Ratios

PERSONNEL + STAFF IMPROVEMENT: Financials

PERSONNEL + STAFF IMPROVEMENT: Margins & Ratios

FORECAST FINANCIAL SCENARIOS

MARKETING EXPENDITURE : Financials

MARKETING EXPENDITURE : Margins & Ratios

NEW PRODUCT DEVELOPMENT : Financials

NEW PRODUCT DEVELOPMENT : Margins & Ratios

MARKET SEGMENTATION : Financials

MARKET SEGMENTATION : Margins & Ratios

NEW PLANT + EQUIPMENT Investment: Financials

NEW PLANT + EQUIPMENT Investment: Margins & Ratios

NEW TECHNOLOGY Investment: Financials

NEW TECHNOLOGY Investment: Margins & Ratios

DISTRIBUTION CHANNEL IMPROVEMENT: Financials

DISTRIBUTION CHANNEL IMPROVEMENT: Margins & Ratios

COST STRUCTURE IMPROVEMENT: Financials

COST STRUCTURE IMPROVEMENT: Margins & Ratios

SHORT-TERM PRICE CUTTING EFFECT : Financials

SHORT-TERM PRICE CUTTING EFFECT : Margins & Ratios

SHORT-TERM PRICE INCREASE EFFECT : Financials

SHORT-TERM PRICE INCREASE EFFECT : Margins & Ratios

QUALITY IMPROVEMENT: Financials

QUALITY IMPROVEMENT: Margins & Ratios

EXPORT SALES IMPROVEMENT: Financials

EXPORT SALES IMPROVEMENT: Margins & Ratios

PERSONNEL + STAFF IMPROVEMENT: Financials

PERSONNEL + STAFF IMPROVEMENT: Margins & Ratios

 Financial Definitions
Balance Sheet / Profit & Loss / Costs / Margins Forecasts Data: The following supplementary data can be found in the accompanying databases.
BALANCE SHEET FORECAST: BEST SCENARIO
COST FORECAST: BEST SCENARIO
BALANCE SHEET FORECAST: WORST SCENARIO
COST FORECAST : WORST SCENARIO
: Marketing Expenditure Profit & Loss
: New Product Development Profit & Loss
: Market Segmentation Profit & Loss
: New Plant + Equipment Investment Profit & Loss
: New Technology Investment Profit & Loss
: Distribution Channel Improvement Profit & Loss
: Cost Structure Improvement Profit & Loss
: Price Cutting Effect Profit & Loss
: Price Increase Effect Profit & Loss
: Quality Improvement Profit & Loss
: Export Sales Improvement Profit & Loss
: Personnel + Staff Improvement Profit & Loss
: Marketing Expenditure Margins
: New Product Development Margins
: Market Segmentation Margins
: New Plant + Equipment Investment Margins
: New Technology Investment Margins
: Distribution Channel Improvement Margins
: Cost Structure Improvement Margins
: Price Cutting Effect Margins
: Price Increase Effect Margins
: Quality Improvement Margins
: Export Sales Improvement Margins
: Personnel + Staff Improvement Margins
: Marketing Expenditure Profit & Loss
: New Product Development Profit & Loss
: Market Segmentation Profit & Loss
: New Plant + Equipment Investment Profit & Loss
: New Technology Investment Profit & Loss
: Distribution Channel Improvement Profit & Loss
: Cost Structure Improvement Profit & Loss
: Price Cutting Effect Profit & Loss
: Price Increase Effect Profit & Loss
: Quality Improvement Profit & Loss
: Export Sales Improvement Profit & Loss
: Personnel + Staff Improvement Profit & Loss
: Marketing Expenditure Margins
: New Product Development Margins
: Market Segmentation Margins
: New Plant + Equipment Investment Margins
: New Technology Investment Margins
: Distribution Channel Improvement Margins
: Cost Structure Improvement Margins
: Price Cutting Effect Margins
: Price Increase Effect Margins
: Quality Improvement Margins
: Export Sales Improvement Margins
: Personnel + Staff Improvement Margins

 

4

Base Market & Revenue Forecasts:

 

MARKET MACRO ECONOMIC SCENARIOS

 

There are four basic issues to investigate when considering the marketing environment for the Company and the industry.

  •    Market Growth

  •    Market Structure

  •    Market/s Serviced

  •    Customer & End User Factors


Market Growth (both short-term and medium term) by each Product and Market Area is is quantified below, as is the historic market data (See: HISTORIC MARKET VALUES).

The Market Structure for the industry is very critical for profitability. The nature of the market, the location of the Market-Place, the customer base and the supplier structure is exhaustively covered.

Market/s Serviced is the term used to denote the function between the product/s and services offered by the Company and the industry and the particular market sector which the marketing effort reaches. The Market Serviced is the true market for the Company and the industry in terms of product/s and services.


THE TRADING AREA

The Market analysis provides data in terms of the maximum operational trading cell areas of the Company. This being the regions, countries or states which form the effective competitive and market environment for the Company. Whether or not the Company currently operates in the various areas covered is immaterial as the effects of the Market-Place exist nonetheless.


BASIS OF MARKET COVERAGE

Reports give coverage of all the Major Products and Markets supplied and serviced by the Company and the base reference industry. The reported Target Markets are those which are perceived to be the most important area for the Company in the Medium and Long Term.

In that this report is conceived as Market & Corporate documents it is felt important to concentrate only on those markets which represent the corner-stones of the industry customer bases and not become involved in any peripheral activities of the industry.

Market coverage is designed to encompass not only the existing markets for the Company, but also areas of market expansion, product segmentation, parallel markets, et al. By the same token the data excludes those market areas or sectors which are unavailable to the Company for whatever technical or commercial reasons.

 

The MARKET figures given in this section are notated as DSP (5) and the notations indicated signify the following:-

(1) = VALUE GIVEN AT INDUSTRY SHIPMENT VALUES OR PRICES
(2) = VALUE GIVEN AT WHOLESALE VALUES OR PRICES
(3) = VALUE GIVEN AT RETAIL VALUES OR PRICES
(4) = VALUE GIVEN AT PRICE PAID BY END USERS as appropriate
(5) = VALUE GIVEN AT ACTUAL PRICE PAID discounted as appropriate

UNITS = Units times the multiplier given in brackets, E.g. ( '000 ) = x 1000 Units

 

TERMS USED IN THIS REPORT

MSP: - Supplier or Producer Prices
WSP: - Wholesale or Distributors Sale Prices.
RSP: - Retail Sale Prices.
CSP: - The price at End User or final distribution level.
DSP: - The price actually paid net of discounting.

TURNOVER: Turnover is sales plus investment income, grants and other funds received, income from disposals and other sources.

 

VALUE TERMS AND VOLUME TERMS

The standard report generated usually provides data in VALUE terms. This is by far the most popular (as demanded by readers) measure of commercial activity. We can also provide data in VOLUME or UNIT terms and this can be specified when the report is ordered. Obviously some reports do not lend themselves to Volume quantification and thus availability of this data will vary according to the report and the database.

 

 

Market & Revenue Comparisons: Base Macro Economic Forecasts

 

Target Company

Base Reference Market

 

MEDIAN ECONOMIC FORECAST Scenario Revenue Forecast

MEDIAN ECONOMIC FORECAST Scenario Product Share Forecast

BEST ECONOMIC FORECAST Scenario Revenue Forecast

BEST ECONOMIC FORECAST Scenario Product Share Forecast

WORST ECONOMIC FORECAST Scenario Revenue Forecast

WORST ECONOMIC FORECAST Scenario Product Share Forecast

MEDIAN ECONOMIC FORECAST Scenario Market Forecast

MEDIAN ECONOMIC FORECAST Scenario Product Share Forecast

BEST ECONOMIC FORECAST Scenario Market Forecast

BEST ECONOMIC FORECAST Scenario Product Share Forecast

WORST ECONOMIC FORECAST Scenario Market Forecast

WORST ECONOMIC FORECAST Scenario Product Share Forecast

 Market Definitions

 


5

World Markets:

 


CURRENCY DATA:  The currency figures given in this report are in U.S. Dollars.
If the Windows Regional Settings on your computer is set to a non-U.S. setting then the currency symbol ($) may appear in the local currency (, , , etc.).
Either reset your Regional settings, or alternatively read all currency figures in this report as being U.S. Dollars (US$).

 

 Market Definitions

 


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