Financials and Key Metrics for M&A

Financials and Key Metrics for M&A

October 20, 2023 by investor

Financials and Key Metrics for M&A

In selling your business, the buyer will look for key financial metrics.

Here are some key metrics to include in your pitch:

Total revenue — revenue before discounts, returns, and adjustments.

This shows top-line sales for the company.

Sales in units — the number of units sold over a period of time.

This helps the buyer in estimating forecasts.

Cost of customer acquisition — the cost to acquire new customers.

This shows how much is required to gain a new account.

Gross margin — revenues minus cost of goods sold yields gross profit.  

Gross margin is the gross profit divided by revenues and shows how much revenue is left over for sales and marketing expenses.

Growth rate — percent increase in sales month over month, or year over year.

This shows how fast your startup is growing.

Burn rate — the amount of cash spent over and above the incoming revenue.

This shows how much cash is required to maintain the current business level.

Fixed costs — the costs that are fixed regardless of the amount of units sold.

This shows the overhead required to run the business.

EBITDA — the revenue minus the cost of goods sold and sales and marketing costs.

This shows the amount of revenue available to reinvest in the business.

Acquirers will want to see these numbers to consider buying your company.


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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.