We generally require the following documents and information:
1. Year-end financial statements
and/or business tax returns
Three years of complete financial statements and Federal. income tax returns if you have both.
2. Latest monthly statements
Detailed income statements and balance sheets for months since the last year-end statement. Sales by month for the last two years.
3. Detailed category breakdowns
Sales and cost of goods sold by category, payroll summary, insurance policy data, utility expenses and other major expense
breakdowns. We need an itemization of owner’s discretionary income, a list of any one-time or extraordinary, non-recurring income and expenses, detail of accounts and notes payable and receivable, and a list of company-related debts, complete with amounts, rates, terms and conditions.
4. Working capital explanations
Seasonal inventory levels and accounts receivable details and norms. We need to analyze working capital requirements through time and how these needs have been funded.
5. List of all furniture, fixtures,
equipment, vehicles and inventory Tangible assets of the business with costs, brand names, model numbers, ages and conditions noted, and the accountant’s tax depreciation schedule. Lists of assets
owned, but not used in the business, and of the assets used; but not owned, are also needed.
6. List of intangible assets and liabilities
All intangible assets or liabilities; including agreements with a previous owner, equipment or real estate leases, patents, copyrights, trademarks, or supply or vendor agreements. Liabilities might include such things as environmental problems, employee problems, technology problems, pending r current lawsuits, and/or pending or current regulatory actions.
7. Company brochures and history
Pamphlets, product or service descriptions, price lists, marketing manuals and copies of advertising. A narrative history of the company is extremely helpful if available.
8. List of employees
Names, job descriptions, hours, wage rates, last year’s total compensation (W-2s), this year’s compensation to date, current benefits being received and future expectations. Key employees need to be flagged and the reasons for their importance noted.
9. Legal documents of the business
Real estate surveys, plot plans or diagrams, tax assessment records, real estate and/or equipment-leases, environmental reports, a list of owners, and copies of operations or personnel manuals, deeds, partnership agreements, corporateb9-laws and other documents may be needed.
10. Internal management information
Budgets, marketing studies, business plans or previous appraisals.
11. Lists of critical customers and/or vendors
High percentages of business done with major customers and/or vendors need to be noted.
12. List of competitors and industry information sources
Major competitors, their estimated market share and explanation of their competitive advantages. Trade or professional associations and/or publications relevant to the business.