You must cover all of these topics:
· The company's market position (relative to its competitors)
· Business Model (how sound is it?)
· An assessment of the company's sources of inputs and finance
· Risk management systems/corporate governance mechanisms in place (you may want to compare this with the requirements for listed companies on the London Stock Exchange, available on the Exchange's website)
· Financial Performance (look at the liquidity/working capital position, profitability, gearing etc. What can you improve to generate synergy?
· Expansion potential
· Strong franchise value- this is the best source of growth. Does your target company have one it's probably not maximising?
· Management team- poor management team is generally a motivation for takeover. There are ratios to calculate management efficiency.