The Mañana Man Gets Serious--DeWese
C. Usually, the most valuable companies are "current" with their investment in capital expenditures. They have consistently invested in the most efficient and productive technology.
D. Often, the most valuable companies have lower assets-to-sales ratios. For example, a company with assets of $5 million supporting sales of $15 million will be more valuable than a company with assets of $7.5 million supporting the same sales of $15 million. Obviously, the ratio of 1:3 implies more efficient utilization of the assets, as well as more frequent turns of the current assets. On the other hand, the company that has deferred cap expenditure investments and is temporarily benefiting by getting by with old equipment will also have a good, but misleading, assets-to-sales ratio.
E. Valuable companies always have stable, loyal, active, prospecting oriented, well-trained and productive sales teams. The company leadership has a sales focus, is "in touch" with customers and respects the contributions of the sales team.
F. Valuable companies have an active managerial (versus custodial) finance and accounting function. The CFO is a team member and actively seeks to improve company performance. Valuable companies use their MIS system to its fullest extent and all employees perceive it as a vital tool. Frequently, the most valuable companies produce their monthly operating statements in fewer than five days post closing.
G. There is an active effort to improve receivables and inventory turns.
H. There are partnership relationships with suppliers.
I. There is no account concentration where one or a few accounts amount to a material percentage of total sales. For that matter, there is no salesperson concentration where one at-will salesperson accounts for, say, more than 25 percent of total revenues.
J. Valuable companies typically do things together and celebrate together.
K. Valuable companies are good citizens and give back to their communities.