Enterprise Value
A buyer reads three years of tax returns. A closed year cannot be amended. Baru tells an owner the earliest date their record will hold up, and what it costs to move before then.
What a buyer actually reads
When someone buys a company, they do not look at the year in progress. They look at the trailing twelve months and the last two closed fiscal years, and some look back five. Whatever those say is what the owner gets paid.
Most owners assume they can clean things up before they sell. Some of it, yes. But a year that has been closed and filed cannot be fixed with effort, money, or good intentions. It is already part of the record a buyer will read.
A few problems can be solved this quarter. Others can be solved tomorrow and still take two or three years before a buyer can see the result. Knowing which is which is the difference between a plan and a hope.
Who is in the room
Cash, conventional, private equity or a bank. It makes no difference to this part.
Is engaged by the buyer or the lender and reports to them. Their job is to test your price, not to defend it.
Reconciles your statements, returns and bank records to find what your earnings really are. Commissioned by the other side.
Hundreds of information requests, worked through by a team paid by the person across the table.
Every one of them reads a record you can no longer change. That is why this work belongs years earlier, and why it has to be done by somebody sitting on your side of the table.
What Baru produces
These are rarely the same date, and the distance between them has a price. Most owners meet that distance for the first time at the table, when there is nothing left to do about it.
The earliest point at which nothing left in the record stops a transaction or stops the financing.
The earliest point at which nothing left in the record is still costing you price.
The Defensible Date Review
The Defensible Date Review™ reads the record the way a buyer will, identifies what stands between the business and the price it should command, and sorts those findings into what has to be fixed before a sale and what will cost money if it is not. Each one carries a date. The earliest date at which none of them still block is the answer.
This is a sell-side diagnostic. It reads your records the way a buyer's accountants will, and finds what those accountants would find, before they find it.
Everything it turns up is still open to you, which is the whole reason for doing it now. Some of it you can correct this quarter. Some you can correct tomorrow and still wait two or three years before a buyer can see it. Telling those two apart is the work.
The periods are not opinions. Each one is derived from a stated authority and applied the same way every time, so two advisors working from the same record reach the same date.
Where a finding cannot honestly be dated, the Review says so on the same line rather than leaving it out. And if the honest answer is wait, that is the answer you get.
How the work runs
Enough for me to understand the business and price the work honestly. Not enough to advise you, and I will not pretend otherwise. Anyone willing to tell you what to do before looking at your records is guessing.
The findings, your reporting tier by year, both dates and the two value figures. A fixed fee, not contingent on anything the Review concludes, and credited toward the continuing work if you go on.
Where the value actually sits, which drivers move it, and what a lender will support. Then the work of closing the gap: the measurement built, reported monthly, board level each quarter. That second half is described under CFO Services.
Inside the third step
Most owners have been given a number at some point. Very few have been shown the work behind it, and almost none have been told which specific things would change it.
Recast, documented, and tied line by line back to your returns. Not what the return shows on its face, and not what you wish it showed. What a buyer's accountants would agree to.
Real transaction data for your industry and your size, pulled for your engagement. Not an industry rule of thumb, and not a multiple somebody remembers from a deal in 2019.
How the business performs sets the multiple. How much of it runs without you sets what comes off. Folding those two together is how an owner ends up holding a number no buyer will pay.
Occasionally the surprise. On one engagement the financing ceiling sat above what the market evidence supported, which meant the bank was never the constraint. Transferability was.
What comes out is three numbers rather than one: what the business is worth today, what it is worth run at the standard of its market, and what the best in its class are worth. Then the specific drivers standing between them, ranked by what each one is worth to you rather than by how hard it looks.
That ranking is the plan. Everything after it is execution.
For federal contractors
If most of your revenue comes from federal contracts, a buyer reads more than your financial statements: your contracts, clearances, certifications, capabilities and specialization, and whether your set-aside work survives the sale.
Not there yet
Start with the value gap estimate. About fifteen minutes, nothing to pull together beforehand, and it returns a directional read on what the business is worth today, what it could be worth prepared, and the distance between the two.
It is a first look rather than an answer, and I review every result myself before it comes back to you.
Bring what you have and what you are thinking about. If a sale is years away, that is the right time to be having this conversation rather than the wrong one.