Financials for a business plan

[Kjlawrence63]

Hello,

I am trying to complete the financial analysis for my business plan and as I am not an accountant I am struggling to find answers to my questions. Would someone be able to assist me please? I have tried to find answers through other forums and from other accountants but I'm not having much luck.

The questions I am trying to answer are as follows:

Market View

How would I find out what "Business at year 0" would be for the Target Corporation (over a 5 year period), I.e Business at year 1,2,3 and 4
The Estimated % Growth (Decline) again for Target (over a 5 year period)
The Estimated New Product % Growth and
The Estimated Cannibalization Effect % (both over a 5 year period)

Any help with my questions on how to find out or calculate it will be extremely appreciated.
Thank you for your time and help with this before hand.

Kind Regards,
Kathryn

 

[ArcSine]

The first three points are just asking for the growth or decline, as a % rate, in some particular value. In the assessment of an acquisition target, some of the values an acquiror is interested in forecasting include cash flow, net profits, revenues, among many others. To answer your question you'll need to first know exactly which value is being measured.

Considering that the question set bears the heading "Market View", it might be that they're wanting to measure growth or decay in some value such as Revenue or perhaps Market Share.

"Cannibalization effect" generally refers to the amount (whether in units, market share, revenue dollars, or whatever) which a new product steals from an existing product. Suppose I have Product A which has been in production for a few years and which sells a consistent 100 units per year. After I introduce new Product B, my research tells me that my sales of A have declined to 90 units per year, due to some customers switching to buying B instead of A. In such case, B has "cannibalized" A to the tune of 10 units per year, or equivalently, 10% of A's previous sales rate.

As you can see, you'll first have to determine what value is being measured before you can make headway with the question; i.e., is it revenues? cash flow? market share?

 

[Kjlawrence63]

Thank you ArcSine for helping me with this. I do greatly appreciate it.

Could I possibly email you a screen grab of what I am trying to complete please? It might make more sense to you then of what I am talking about.

 

[ArcSine]

Check your PM.