A business case provides justification for a proposed change and the allocation of capital and resources to make the change work. Typically, a business case is written after a group or task force meets and reviews a specific issue or opportunity. It may act as an impetus for moving forward with a concept, or it may simply help to provide a consistent message or unified vision from the group.
To prepare a business case, we look for the data in the S-1 form. An S-1 form contains data like the revenue model, revenue drivers, challenges and risks in the business. The S-1 form can be found in http://www.sec.gov/
Let’s say we want to find the S-1 form of Kings Digital. Find the link here
Apart from these, information on the business case can be found from various analyst reports or free sources like yahoo finance, Google finance, MSN finance
The links for these sites are given below
There are paid sources like Bloomberg from which information on business case can be obtained. The link is given below
Things to look for in an S-1 form
We typically look for the following things in an S-1 form
· Historical financial statements
· Revenue model and revenue drivers
· Risks and challenges that the management perceives
· Anticipation of increase or decrease in costs and revenues.
· Information on debts, depreciation and capital expenditures that the management discussion says
These are some of the major things that we look in an S-1 form. A sample S-1 form that talks about the risks of business of Kings Digital is shown in the image below. The images also show the operating metric or the drivers of business of Kings Digital. All these information are found in the S-1 form
Broad steps in preparing a business case
· From the S-1 form and management discussion see what are the revenue drivers
· From the historical statements and the management discussion project the costs fro the future periods
· While projecting the revenue drivers also take into account the risks and challenges that the management discussion says
· Use information on debt to prepare the debt schedule
· Use information on capital expenditure to estimate the capex for future period and to prepare the asset schedule
Business cases are created to help decision-makers ensure that:
• the proposed initiative will have value and relative priority compared to alternative initiatives based on the objectives and expected benefits laid out in the business case
• the performance indicators found in the business case are identified to be used for proactive realisation of the business and behavioural change
Hence whatever your business is or whatever you do in the financial world, business case studies are an essential part of the scenario. We will give you Insights into how to solve a case study and eventually make sure you learn to solve a case study on your own in a professional way.
Here are a few steps you can follow to make a case study. You can download our case study on Candy Crush IPO for a clear understanding.
Let us take the example of the Candy Crush IPO and move forward by analysing and making a case study.
• We first make a list of the drivers that keeps the company in profit – Like the sale of virtual items to its customers
• Secondly we make an analysis of its sales model
• Then we benchmark and compare to other company models
· We,also take into account the risks associated with the business
• We also list all the key assumptions we have taken into account
• An Abridged DCF Valuation is also done, which we will teach you in our class on DAY 2
• There are a few more analytical steps in between before we finally complete the case study with a relative analysis
You can download and see the complete case study along with the excel model for Kings Digital. EduPristine’s extensive financial modeling course also covers this aspect in more detail. For more information on the same you can quickly write an email to firstname.lastname@example.org .