Client: Regional Print Distributor
Problem:
The company had more than 4500 individual customer accounts and needed a way to understand how profitable each client was. They also needed a way to share this information effectively with prospective investors in the company since this information was an essential component in discovery for a pending merger transaction. Accurate, verifiable and easy-to-understand information on client profitability would help maximize the the company's valuation.
Scope of Work:
The client asked Quantalyst to develop and report individual customer profitability for all active customer accounts. Since the results of this project had an impact on a pending transaction, the work had to be completed within three weeks.
What Quantalyst Did:
- Developed activity-based cost analysis and assignment methodology for each customer.
- Analyzed and calculated auditable complexity profiles for each customer account.
- Separated non-business and business related costs across the organization.
- Provided documented audit trail for all cost data.
- Calculated and reported quarter-by-quarter customer profitability up to the closing of sale.
Results:
- Customer profitability information provided key input to maximize ultimate corporate valuation and sale price.
- Elimination of non-business related activities created enhanced valuation. The accompanying audit trail assured the investors that they were maximizing value by eliminating those activities while focusing on the most profitable aspects of the business.
- Audit trails backed the credibility of management reporting during the due diligence process and reduced the time required to to close the deal.
