Series 79: Sample Precedent Transactions Analysis Of Elite Branding Consultants

Taken from our Series 79 Top-off Online Guide

Sample Precedent Transactions Analysis of Elite Branding Consultants

The following section provides a step-by-step example of how a precedent transactions analysis works in practice, ultimately establishing a valuation range for Elite Branding Consultants, a company that Superior Products is hoping to assess in advance of a potential merger.

Elite Branding Consultants is a brand development company that plans and implements strategies for retailers and fashion designers. Following are Elite’s most recent income statement and balance sheet data:

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Elite Branding Consultants

Consolidated Statements of Income
(dollar amounts in millions)

LTM

Net Revenue

$720.00

Cost of Goods Sold (COGS)

355.00

Gross Profit

$365.00

Salaries, Wages, and Benefits

150.00

Marketing, General and Administrative

100.00

Depreciation and Amortization

20.00

Total Operating Expenses

$270.00

Operating Income

$95.00

Interest Expense

9.00

Income Before Taxes

$86.00

Income Taxes

32.25

Net