Channel Ten’s Shark Tank was back for a second season, aired between 8 May and 7 July 2016, and featured budding entrepreneurs pitching their business ideas to venture capital investors (the ‘Sharks’). Moore Stephens’ Victorian Corporate Advisory Team took this opportunity to once again swim with the Sharks and gain an insight into the minds of both entrepreneur and investor.

The focus of this post is on forecasts and discounted cash flows (DCF) that clients typically use to justify the carrying amount of goodwill in their books as part of testing for impairment.  My view is: before you even get to the mechanics of the DCF, ask what’s the business narrative?  

My previous article about the Moore Stephens Victoria Corporate Finance team was on work we had been doing during winter on Initial Public Offerings (IPO), reverse takeovers (RTO) and an expert witness report.  Some of that work carried over into Spring with a successful outcome for a number of those clients. 

In this article I am writing about some of the interesting work we have been doing with financial forecast modelling – primarily for financiers.  I also find this somewhat encouraging that a number of our clients are out there getting finance for expansion and new businesses.