Framework for Evaluating Investment Cases in Due Diligence PPT

This PPT slide, part of the 63-slide Commercial Due Diligence (CDD) PowerPoint presentation, outlines a structured approach to evaluating an investment case within the context of due diligence. It emphasizes the necessity of developing a clear perspective on the investment case while identifying potential areas for improvement and associated risks. The objective is to assist private equity firms in substantiating their investment assumptions and recognizing key risks and opportunities.

Three primary subcomponents are highlighted. The first is Investment Case Development, which focuses on identifying the key assumptions that underpin the investment case. This involves creating an EBITDA tree for the target company and developing base case projections. The link between these assumptions and factors such as market conditions, competition, and business model analysis is crucial for a comprehensive understanding.

The second subcomponent, Investment Case Assessment, delves into the robustness of the key assumptions. It requires identifying key value drivers and assessing the underlying assumptions related to these drivers. This step is essential for validating the investment case and ensuring that the assumptions are well-supported by market and competitive insights.

Lastly, Risk and Reward Analysis addresses the potential upside opportunities and risks associated with the investment case. This analysis aims to present both upside and downside scenarios to evaluate the overall balance of the investment case. By systematically addressing these components, the slide provides a framework that can guide decision-making and risk management for potential investors.

Overall, this slide serves as a critical tool for private equity firms, helping them to navigate the complexities of investment evaluations and make informed decisions based on thorough analysis.

This slide is part of the Commercial Due Diligence (CDD) PowerPoint presentation.

This presentation is created by former McKinsey, BCG, Deloitte, EY, and Capgemini consultants. It explains the approach to Commercial Due Diligence utilized by global strategy consulting firms.

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Due Diligence Risk Management Private Equity

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