Purchase Price Allocation Simple Guidance + Goodwill & Consolidated Balance Sheet Template

This is a simple excel explanation model of Purchase Price Allocation with a dynamic and ready-to-use consolidated balance sheet template for the M&A PPA process.

This model is extremely useful for M&A acquirers to plan deal structure and to perform pro-forma consolidated balance sheets to better understand what’s impact of deal structure on the acquirer’s post-closed balance position and how much new goodwill will be generated by the potential transaction.

The model provides a simple and easy-to-follow Purchase Price Allocation guidance explaining the actions to take on and key takeaways of each step.

In addition, the model can be used as a template for buyers’ post-closed transaction consolidated balance sheet.

The model is highly dynamic and flexible. Users can customize the transaction inputs based on their real case by adjusting the BLUE numbers. The result will be automatically updated.

The model consists of five parts, A simple guidance, Assumptions, Acquirer’s Financials, Target’s Financials, and Consolidated Acquirer’s Balance Sheet.

In the Guidance, the users can learn generally the PPA process and key takeaways of each step. This part provides basic and important information for users who have little experience of the industry and can be great helpful to see the big picture of the Purchase Price Allocation.

Assumption part includes the hypothesis of the deal structure, market information of buyer and target, assets adjustment assumptions.

At the bottom of the assumption part, users can learn all the details of the mathematical logic of Purchase price, Goodwill, Deal Financing, Deferred tax liabilities calculations.

The calculations are quite intuitive and easy to understand without any sophisticated formulas embedded. All users either from a finance background or other fields can easily follow up.

The LTM balance sheet and P&L have been demonstrated in sheets of Acquirer’s financials and target’s financials.

The Consolidated Balance sheet is the output of the model that showcases what is the acquirer’s pre-closed and post-closed financial position under the deal structure established.

This model is completely dynamic and flexible that allows the users to modify the key transaction measures and to see the results based on distinct cases. The numbers in color BLUE could be adjusted and the outputs and analysis results will be automatically updated.

The structure of the template follows Financial Modeling Best Practices principles and is fully customizable.

Model Structure

Introduction
• Cover
• Simple Guidance

Inputs
• Assumptions
• Acquirer’s Financials
• Target’s Financials

Calculations
• Purchase Price Allocation part of Sheet Assumption

Outputs
• Consolidated Balance Sheet

Users’ Support Service

To guarantee users’ satisfaction, all the models have been built following the Best Financial Modeling Principles and considering the high level of flexibility and user-friendly in priority.

Even the users who have no finance or accounting background or have little experience in Microsoft Excel can easily handle them to assist in making better decisions.

Please feel no hesitate to contact us if you experience any problems when using the models provided.

In addition, if you need a customized model for your specific business, please just let us know and we would be happy to help you with this.