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Case Study

Analyzing Performance & Prepping for Sale

Industry
Team Size
1 Senior Director, 3 Vice Presidents, 2 Associates
Project Duration
16 weeks

The Challenge

A manufacturing firm, grown via acquisition, was in need of core financial and operational analyses as the basis for an economic forecast model. The model would analyze periodic performance and provide data driven answers to questions posed by key stakeholders and investors. Additionally, the Company required back-period audits for its acquired entities in order to build an audited historical view of whole company financials. The Accordion team was engaged to develop robust historical analytical models, provide audit readiness, process and controls narratives and financial statement preparation.

Services

Sell-Side Readiness

Actionable Business Analytics

Stakeholder Reporting & Strategic KPI Enhancement

The Execution

Contacted on a Monday by the CFO, we had a targeted, highly-experienced team on the ground in three days to begin work on a series of key deliverables.

Sale Process Preparation – Since the Company had scaled via acquisitions, all data (transactional, operational, and financial) resided in a variety of disparate systems. Our role was to prepare two primary pieces of analyses:

  • Pocket Margin Analysis – The fully integrated manufacturing firm operated 70+ distinct plant locations. However, the Company had no accurate way of measuring profitability by product, end market, customer, plant, or salesperson that would fully tie the Company’s general ledger to its underlying transactional data. We built a series of pocket margin tools for its primary business units and developed methodologies to integrate non-costed products into the tools.
  • PVM Analysis – 35% of the Company’s costs are raw material related. However, the Company had no way of 1) tracking changes in raw material consumption through its vertically integrated manufacturing process or 2) understanding the impact of raw material price movements on profitability on either a location by location or division by division basis. Using transactional level data, we built several economic models that analyzed and attributed changes in raw materials purchases to changes in the price of fiber, volume of fiber purchased, and mix of fiber purchased. By reconciling transactional data with general ledger data, potential buyers would know the transactional data accurately represented what was reflected in the general ledger.

The Results

Our team developed and transitioned dynamic, robust and easy to update models which gave the Company insights on the Pocket Margin Analysis and PVM Analysis. The Company could then compare and assess profitability by various factors as well as view trends. What’s more, the Company could accurately attribute changes in input costs to changes in specific cost drivers.