understand your debt picture

Do You Fully Understand Your Debt Picture?

In Financing Resources by Brandt A. HandleyLeave a Comment

Is your Middle Market organization considering a merger? How about an acquisition or being placed for sale in the foreseeable future? You’ll need a complete and accurate picture of your finances. You must get granular and large scale, together. Running the business on a day to day basis, you likely know your debt and profit margins fairly well. But any of these events means needing to knowing your financials inside and out to entirely different levels.

Getting Granular With Equipment & Data

Firstly, when lenders or other organizations will be combing over financial data with fine-tooth combs, they’ll be looking for and evaluating information your company likely takes for granted or doesn’t focus on. It will be important you fully calculate and evaluate all debts. Be sure to include those associated with all mobile and computing devices. And don’t forget about including those used for employees who work at home. You’ll need to calculate more details about offsite hardware and software used for your systems and backups. Your data can become an asset or have associated costs. So, essentially, everything your company uses in all aspects of your organization will need to be evaluated, priced and documented.

Custom Designed Software Or Equipment

Also, you may need custom designed software, or equipment in order to effectively run your Middle Market organization. While having these products that you own or lease are essential to your success, they need to be considered for potential debt just the same. Therefore, they may be an intangible asset to your organization and yet still technically be debt producing. Also, anything custom typically means higher associated costs for upkeep, updating, and replacement. It may be difficult to fully estimate costs, but you’ll need to.


Employees are assets just the same as computers and office equipment – not on the same level surely, but there are costs associated with your staff like any other asset. You’ll need to know the TCO (total cost of ownership) for employees, which goes far beyond their salaries. TCO takes all aspects of employees into account including training costs, all salary, bonuses, benefits, costs associated with benefit administration, payroll, etc. You are likely getting the picture of how in-depth TCO can get. It be an essential item to calculate your debt.

Physical Space

Do you own or rent your locations? The land and the buildings? Are you involved in any sales leaseback situations? Do you outright own your office décor and furniture – desks, chairs, couches, kitchen or breakroom furnishings? All of these things add up to either assets or debt or potentially both. Again, you may not really think about them in such precise terms, but you’ll need to for a sale, merger or acquisition.

Your full debt picture can be quite different if you are looking at acquiring or being acquired or setting up for a merger or outright sale. If one of these events are on your horizon, you’ll become a lot more aware of every tiny detail of your debt picture.

So what’s in the Mighty Middle Market for me? — get it right now at www.Go4ROI.com.

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