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What factors should you look at when considering the acquisition of an existing business?

What factors should you look at when considering the acquisition of an existing business?

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Answer #1

The factors should you look at when considering the acquisition of an existing business -

  • The acquisition should take place to increase the value of business by increasing scale of business or cost saving on various common business processes of both companies.
  • There should be an increase in cash flow. Proper estimate of cash flows generated after the acquisition.
  • Increases the brand value and company which can become bigger player in the market and a big challenge to its competitors.
  • The acquisition should help the company to reduce substantial cost and make the company more competitive.
  • The acquisition should help in geographical diversification or diversifying its product base; which can give growth opportunities and prospective future growth.
  • Accusation should increase the shareholders’ value in long-term
  • It should increase the customer base of the company.
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