Getting down to the smallest detail to answer one big question.
High-level financial data can only reveal so much. The real story about a business is often hidden away in the detailed data within individual transactions. For anyone thinking of buying a business, being able to explore that data to really understand performance and potential is crucial.
Our client, a private equity company, was interested in purchasing a large, decentralised B2B company with multiple branches and thousands of customers. Before they made a bid, they needed to understand why the company’s revenues were growing faster than its bottom-line earnings.
Scroll down to continue reading...
KPMG’s Strategic Profitability Insights and Strategy teams asked the target company for their transactional data. We downloaded this – millions of transactions – along with financial data for each of the company’s 30+ branches. Starting from this most granular level, we built up a robust dataset that we could drill down into to answer our client’s question.
Using sophisticated analysis and proprietary tools, we generated a fully loaded cost per transaction that could be analysed by transaction, by product category, by customer or by branch. Our rapid analysis revealed that the company had a large amount of small orders. The high cost of fulfilling these was producing a loss for the company and this, in turn, was dragging down earnings.
Our data and analytics experience helped our client quickly identify opportunities to improve the way the business was being run and potentially add up to £19 million in value. With this insight, they were able to make a much smarter, more informed decision on how much to bid.