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Acquisition Considerations to Avoid Blunders
- Do you know and understand the business you are about to buy?
- Do you know how the revenue is generated, expenses incur and what influences the cash flow?
- Is there a pricing flexibility? What is the profit margin?
- Have you thoroughly checked the operating history?
- Do you know the long-term prospect?
- Do you know the competition?
- How is the management? Honesty, Depth & Ability?
- How is the management-employees relation?
- What is the ROE without undue leverage and/or creative accounting?
- Is your due diligence comprehensive and complete?
- Is it asset heavy?
- Are your assumptions aggressive or inconsistent to justify the projected financial return?