WHY SBXC© Analyze?
Financial analysis is the in-depth assessment of the firm's reported financial statements in a bid to better understand its historical performances while valuation is the analytical process of determining the worth of a company. Both financial analysis and valuation help unravel the big story behind the numbers and facilitate investment decision-making.
Before investing in a firm, it is critical to be aware of how the firm is performing financially in order to make an informed business decision. Although the financial statement serves as a window into the firm's finances, relying on the numbers presented at face value is wholly insufficient. A financial analysis must be done on the numbers to generate decision-useful insights prior to investing.
A financial statement yields valuable insights into a company's strengths, weaknesses, as well as how well it interacts with environmental opportunities and challenges. Therefore, when a financial analysis is carried out on competitors, the findings shall be helpful in shaping the organization's competitive strategy. Sun Tzu said: Know the enemy and know yourself; in a hundred battles you will never be in peril.
Valuation is the analytical process of determining the worth of a company. For investors, valuation guides investment decision. After a valuation is completed and the price is found to be above its intrinsic value, the security is considered overvalued. Similarly, if the price is found to be below its valuation, the security is deemed to be undervalued. For creditors, valuation also helps to answer the expected loss when the company defaults.
If you are keen to raise fund from investors and lenders, the prerequisite of doing so is usually a financial analysis and valuation exercise. The valuation yields a price point to kick-start the negotiation, while financial analysis helps articulates the key strengths and weaknesses of your firm's business model, as well as highlight prospective environmental challenges and opportunities to your investors and financiers.
WHO ARE WE?
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WHAT IS INCLUDED IN THIS REPORT?
SBXC© Analysis is designed for shareholders and lenders who seek financial insights to guide their investment decisions. This service is also suitable for businesses aiming to carry out fundraising, as well as organizations looking to conduct competitor analysis. For sell-side clients, the process is highly consultative as disclosures of corporate information and management assumptions are needed to facilitate the valuation process. Any disclosed information will be kept in the strictest confidence.
This portion contains analytical insights on the company's finances based on publicly-available and provided information. The goal is to uncover the underlying narrative that lies beneath the figures and findings on the firm's profitability, liquidity, operational efficiency, and solvency will be shared here.
Soft analytical findings on the organization's business model, its strengths and weaknesses, as well as the various environmental challenges and opportunities, is made available here. This portion is designed to promote an intimate understanding of the business and its environment to facilitate and guide investment decisions.
Modelling & Valuation
A financial model will be created and customized to meet the requirements of the context. For instance, for creditors, the focus will be on the strengths of the borrower's cash flow and recoverability in the event of default, while for M&A investors, the focus will be on hard and soft synergies and financial leverage. A valuation will also be computed. The method depends on the context of the analysis, as well as the availability of public-information.
As financial modelling and valuation are forward-looking in nature, risk management has to be done to account for future uncertainties. The risk management method shall depend on the context of the analysis and the availability of information. Generally, our clients can expect a range and distribution of values, as well as a deeper understanding of the drivers being value and risk.