Banking TNT

A good commercial loans broker can realize their need to assess your use before submitting it to a finance company assuring that hot weather is going to the right lender also it may have a very good chance of finance approval. Extremely automatic be capable to aid in any cash flows, financial information and presenting the job correctly.

Enterprise value multiples use operating statistics which might be before net interest expense and taxes. The reason for this is that the capital structure from the company (simply how much debt vs. equity it’s) should not play a part in how it is valued. Therefore, interest, which would flow to debt investors, is taken out of the equation.

Although many people are attracted to investment banking because in the high pay, the intense lifestyle causes many to depart after just several years. The real windfall of investment banking for some people may be the boost it gives with their career because with the experience they gain.

There are a large amount of companies within the world that start small and in the end grow out to become a powerhouse corporation rich with assets and capital for investing. When companies grow to your sizable corporation, the following big step for them is to enter into investment banking. This sort of investing comes hand in hand with corporation proprietors to help them through the assistance these banks provide.

Would need to an analyst choose about the way to go out of investment banking about the whole and lots of attain their experience might be leveraged to take into positions that is going to be normally require more experience. After all, many analysts wrack up double the amount several in the average workforce and have to be effective their work in an intensity level that is truly one in the highest inside the company world.

Those who are in corporate Sequoia Presidential Yacht have a great deal of clients. Therefore, they have lot of responsibilities that involve every one of the aspects of corporate transactions. Growing businesses will benefit in the guidance how the corporate investment banks can bestow with them. At exactly the same time, the center-market companies and large-scale corporations can transact securely with all the assistance of the banks.

Investment banks, in contrast to commercial banks, assist public and personal corporations in raising funds inside Capital Markets (both equity and debt), as well as in providing strategic advisory services for mergers, acquisitions as well as other types of financial transactions.

If the corporation is impressed with all the firm and enthusiastic about pursuing a deal, that will engage the firm to execute the transaction. Depending around the type of transaction as well as the conditions from the market, these transactions will take anywhere from several months to a couple of years to complete. At any point in time, bankers could be working on several pitches and deals all at the same time.

Today, mobile banking is without doubt the latest and greatest technology, product, and service currently being offered through various financial institutions. However, one bank has actually pioneered features, making this a time for Standard Chartered Bank to shine. This banks version of a mobile banking application is truly unique, one built on a philosophy of providing what bank customers want.

The majority of other banks who have entered the mobile banking market have focused design and development of mobile banking applications on what they think customers want or what they feel the customers should have. Obviously, to build a strong base of loyal customers, banks have to provide products and services that offer real value. When customers see their voices have been heard and opinions listened to, these customers remain extremely loyal.

For any relationship to work between a bank and its customers, a level of trust and respect must exist. These two components are critical to success for both parties. With Standard Chartered Bank, executives and employees alike have taken every necessary step to offer customers solutions to make life easier, which is apparent in the new and revolutionary mobile banking solution known as Breeze.

When looking at mobile banking solutions offered through other banks, it is common to see that features plateau, even though the type of features may be quite different. However, with Breeze, conventional and revolutionary features have been taken to the next level, for the better. As a result, personal and business customers of Standard Chartered Bank enjoy a much richer experience overall, whether using online or Breeze mobile banking services.

A prime example would be in the way that other banks allow customers to view and transfer money using mobile banking. Typically, these two services are very basic and by providing features with limitations, the customers are shorted. For instance, if a Customer wanted to complete a task or transaction other than viewing an account or transferring money, additional applications through the banks website or through the mobile banking medium would have to be opened.

Let us say that a customer with a different bank wanted to look at the balance in a checking account, but also pay a bill, redeem earned points, or even report a lost or stolen credit card. To accomplish this, one application would need to be manipulated for view the account and another application for the second task. From this customers perspective, it does not appear as if the bank cared much about the effort and time involved to manage money online or via mobile banking.

Obviously, this type of process creates tremendous frustration, which often leads to bank disloyalty. At Standard Chartered Bank, the number one goal beyond anything else is to provide every customer with a smooth and professional experience. For this reason, whether managing accounts online or through Breeze mobile banking, tasks and transactions have been simplified but without sacrificing any of the power.

In addition to happy customers remaining loyal, the online services through Standard Chartered Bank and mobile banking services through Breeze provide an opportunity for other people to hear how great this bank and its products/services are through word of mouth.

Today, more than 20 million US citizens are living without a bank account. The primary reason is due to ChexSystems’ dominating presence within the consumer banking world. It is estimated that over 80% of all banks and credit unions in the United States, use ChexSystems to verify new customer accounts. Most individuals listed in the ChexSystems database were reported due to mishandling of their checking accounts, while the rest were attributed to abuse, fraud, or errors.

Within recent years, many websites have sprung up on the internet offering help for people listed on ChexSystems. Services vary among these sites, ranging from free information to paid memberships. No matter where you turn, there are countless numbers of “victims” venting their frustrations through the use of public forums and message boards.

Most of the frustrations shown by “victims” of ChexSystems seem justified, but even then there are always two sides to every story. Most “victims” feel that 5 years of being “blacklisted” is punishment beyond justification. And if reported in error, even worse a punishment. In addition, many have complained that the banks give no breaks when it comes to consumer mistakes, but are quick to cover up their mistakes when the banks are at fault. Banks, on the other hand, justify using ChexSystems to protect their assets.

Either way you look at it, ChexSystems is a much needed organization in the banking industry. Without ChexSystems, banks would go bankrupt without this type of asset protection against con-artists and account abusers.

The real question is how fair is the punishment for the consumers who innocently have fallen into tough financial situations, and as a result defaulted on their bank account. Is it fair to “blacklist” all consumers the same way regardless of their banking history? These are just a few of the questions that need answering before any proper reforms can be reached.

One of the most challenging aspects of selling a software company is coming up with a business valuation. Sometimes the valuations provided by the market (translation – a completed transaction) defy all logic. In other industry segments there are some pretty handy rules of thumb for valuation metrics. In one industry it may be 1 X Revenue, in another it could be 7.5 X EBITDA.

Since it is critical to our business to help our information technology clients maximize their business selling price, I have given this considerable thought. Why are some of these software company valuations so high? It is because of the profitability leverage of technology?

A simple example is what is Microsoft’s incremental cost to produce the next copy of Office Professional? It is probably $1.20 for three CD’s and 80 cents for packaging. Let’s say the license cost is $400. The gross margin is north of 99%. That does not happen in manufacturing or services or retail or most other industries.

One problem in selling a small technology company is that they do not have any of the brand name, distribution, or standards leverage that the big companies possess. So, on their own, they cannot create this profitability leverage. The acquiring company, however, does not want to compensate the small seller for the post acquisition results that are directly attributable to the buyer’s market presence. This is what we refer to as the valuation gap.

What we attempt to do is to help the buyer justify paying a much higher price than a pre-acquisition financial valuation of the target company. In other words, we want to get strategic value for our seller. Below are the factors that we use in our analysis:

1. Cost for the buyer to write the code internally – Many years ago, Barry Boehm, in his book, Software Engineering Economics, developed a constructive cost model for projecting the programming costs for writing computer code. He called it the COCOMO model. It was quite detailed and complex, but I have boiled it down and simplified it for our purposes.

We have the advantage of estimating the projects retrospectively because we already know the number of lines of code comprising our client’s products. In general terms he projected that it takes 3.6 person months to write one thousand SLOC (source lines of code). So if you looked at a senior software engineer at a $70,000 fully loaded compensation package writing a program with 15,000 SLOC, your calculation is as follows – 15 X 3.6 = 54 person months X $5,800 per month = $313,200 divided by 15,000 = $20.88/SLOC.

Before you guys with 1,000,000 million lines of code get too excited about your $20.88 million business value, there are several caveats. Unfortunately the market does not care and will not pay for what it cost you to develop your product.

Secondly, this information is designed to help us understand what it might cost the buyer to develop it internally so that he starts his own build versus buy analysis. Thirdly, we have to apply discounts to this analysis if the software is three generations old legacy code, for example. In that case, it is discounted by 90%. You are no longer a technology sale with high profitability leverage. They are essentially acquiring your customer base and the valuation will not be that exciting.

If, however, your application is a brand new application that has legs, start sizing your yacht. Examples of this might be a click fraud application, Pay Pal, or Internet Telephony. The second high value platform would be where your software technology “leap frogs” a popular legacy application.

An example of this is when we sold a company that had completely rewritten their legacy distribution management platform for a new vertical market in Microsoft’s latest platform. They leap frogged the dominant player in that space that was supporting multiple green screen solutions. Our client became a compelling strategic acquisition. Fast forward one year and I hear the acquirer is selling one of these $100,000 systems per week. Now that’s leverage!

2. Most acquirers could write the code themselves, but we suggest they analyze the cost of their time to market delay. Believe me, with first mover advantage from a competitor or, worse, customer defections, there is a very real cost of not having your product today.

We were able to convince one buyer that they would be able to justify our seller’s entire purchase price based on the number of client defections their acquisition would prevent. As it turned out, the buyer had a huge install base and through multiple prior acquisitions was maintaining six disparate software platforms to deliver essentially the same functionality.

This was very expensive to maintain and they passed those costs on to their disgruntled install base. The buyer had been promising upgrades for a few years, but nothing was delivered. Customers were beginning to sign on with their major competitor.

Our pitch to the buyer was to make this acquisition, demonstrate to your client base that you are really providing an upgrade path and give notice of support withdrawal for 4 or 5 of the other platforms. The acquisition was completed and, even though their customers that were contemplating leaving did not immediately upgrade, they did not defect either. Apparently the devil that you know is better than the devil you don’t in the world of information technology.

3. Another arrow in our valuation driving quiver for our sellers is we restate historical financials using the pricing power of the brand name acquirer. We had one client that was a small IT company that had developed a fine piece of software that compared favorably with a large, publicly traded company’s solution. Our product had the same functionality, ease of use, and open systems platform, but there was one very important difference.

The end-user customer’s perception of risk was far greater with the little IT company that could be “out of business tomorrow.” We were literally able to double the financial performance of our client on paper and present a compelling argument to the big company buyer that those economics would be immediately available to him post acquisition. It certainly was not GAP Accounting, but it was effective as a tool to drive transaction value.

4. Financials are important so we have to acknowledge this aspect of buyer valuation as well. We generally like to build in a baseline value (before we start adding the strategic value components) of 2 X contractually recurring revenue during the current year.

So, for example, if the company has monthly maintenance contracts of $100,000 times 12 months = $1.2 million X 2 = $2.4 million as a baseline company value component. Another component we add is for any contracts that extend beyond one year. We take an estimate of the gross margin produced in the firm contract years beyond year one and assign a 5 X multiple to that and discount it to present value.

Let’s use an example where they had 4 years remaining on a services contract and the last 3 years were $200,000 per year in revenue with approximately 50% gross margin. We would take the final tree years of $100,000 annual gross margin and present value it at a 5% discount rate resulting in $265,616. This would be added to the earlier 2 X recurring year 1 revenue from above. Again, this financial analysis is to establish a baseline, before we pile on the strategic value components.

5. We try to assign values for miscellaneous assets that the seller is providing to the buyer. Don’t overlook the strategic value of Blue Chip Accounts. Those accounts become a platform for the buyer’s entire product suite being sold post acquisition into an installed account. It is far easier to sell add-on applications and products into an existing account than it is to open up that new account. These strategic accounts can have huge value to a buyer.

6. Finally, we use a customer acquisition cost model to drive value in the eyes of a potential buyer. Let’s say that your sales person at 100% of Quota earns total salary and commissions of $125,000 and sells 5 net new accounts. That would mean that your base customer acquisition cost per account was $25,000. Add a 20% company overhead for the 85 accounts, for example, and the company value, using this methodology would be $2,550,000.

After reading this you may be saying to yourself, come on, this is a little far fetched. These components do have real value, but that value is open to a broad interpretation by the marketplace. We are attempting to assign metrics to a very subjective set of components. The buyers are smart, and experienced in the M&A process and quite frankly, they try to deflect these artistic approaches to driving up their financial outlay.

The best leverage point we have is that those buyers know that we are presenting the same analysis to their competitors and they don’t know which component or components of value that we have presented will resonate with their competition. In the final analysis, we are just trying to provide the buyers some reasonable explanation for their board of directors to justify paying 8 X revenues for an acquisition.

Investment banking is a widely accepted phenomenon presently, the major reason being expert advice provided at every step you need to take. Financial giants take the responsibility of making sure your money grows avoiding the risk of down fall. Today every person at some point or the other thinks about investing some amount of money in the stock market. A major worry of all these people is the uncertainty; investment banking beats these blues and offers best possible investment advice to its customers.

A major chunk of people involved in investment banking do not have the time to keep an eye on the ever changing markets and track their returns. In such cases arises the need for investment banking services. These companies do all the hard work of market research and analysis and advice investors on where to put their money for maximum returns. This also depends upon the amount of money the person is willing to investment.

There are many sectors in which investment banking is being carried out, few of them include retail healthcare, insurance and automobiles. Another emerging trend in this banking is that of equity investments. Equity investment banking is based on the dividends of the existing shares an individual holds. There are expert advisors who guide the movement of funds here as well so that there are no last moment disappointing surprises.

When it comes to investing money not all have the perfect knack hence it is always good to seek help of an expert investment banking company or equity investment banking services. Money after all is a crucial issue and you would always want to see it grow systematically. Another advantage of investment experts is they help you understand the market well. You get to know where your money is going and the reason behind it too. These services do come with at some extra cost but are sure to give you peaceful night sleeps and not make check the stock market prices every now and then. Let the experts do their job so that you can relax and reap the benefits.

Choosing the right financial advisor is also important in such cases. Also reading the fine print before finalizing anything is advised as there are many terms and conditions that come along with investment banking. You can take reviews of family members, friends, colleagues etc in deciding which and choose. There are numerous financial institutions and each one of them is offering investment banking services due to its rising demand.