Why ThruThink ® ?
How much is too much debt?
Determining how much sales will have to increase in order to afford the debt load and equity return expectations and determining if product pricing can be maintained to achieve those sales will make the "risk of the deal" much clearer.
How much do I pay for the business?
If past performance will not provide an acceptable return on the Purchase Price or the debt load required for the purchase can not be supported by past performance, then the "risk of the deal" is higher and the Purchase Price of the Company may need to be lowered.
What is my Cost of Goods Sold? Are my margins too high?
Often the lure of increasing sales will lead to product price reductions, discounts, free product give aways, slotting fees which have the effect of raising Cost of Goods Sold as a percentage of sales and putting immense pressure on the operating margins of the business. This is illustrated with ThruThink®, enabling a plan to understand and avoid the common trap of increasing sales and reducing profit.
Is the risk worth the reward?
ThruThink® Exit Calculations and Balance Sheet projections illustrate the Exit position for the Equity holders which addresses the question "is it worth the risk"?
How much cash do I need?
Most businesses fail because they run out of cash. With ThruThink®, seeing how the cash is generated and used identifies the causes which can lead to a plan of action to avoid the trouble before it happens.
The ThruThink® process will illustrate the very dynamic and interactive relationship between the performance projections for the Company and the debt and related equity repayment requirements and their effect on the cash flow, profitability and therefore the value of the Company. These are essential elements to understand for all those involved in a business and with ThruThink® these are laid out in a clear and organized manner.