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Could anyone give an answer for the last difficult qst please?

Incos Pens
New answer on Mar 21, 2020
1 Answer
1.3 k Views
Hajar asked on Mar 02, 2020

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Daniel
Expert
Content Creator
replied on Mar 21, 2020
McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

Hi Hajar,

Since the valuation of the asset would be based on the discounted cash flow method, your aim here is to increase the cash flow in short term to drive the price up (and to create an appearance of higher future cash flows for a potential buyer). How would you do it?

You would just look for quick fixes, i.e. something you could implement in the short-term – BEFORE naming the price for sale. In this case those measures would be:

  1. Increase prices for your products
  2. Reduce labour costs (either by reducing salaries or by firing part of the non-critical workforce)

Hope this helps! DM me if you have further questions.

Best,

Daniel

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