Preparing for an IPO - Excellence in Financial Management

NYIBDF14\200611\08 NOV 2000\2:08 PM\5Public vs. Private Company Perspective• Public companies facesignificantly higher scrutinythan private companies• Effective and timelycommunication to The Streetwill strengthen a publiccompany’s credibility, whichis key to valuationPublic Company• Accountability– External shareholders– Research Analysts– Management– Board of Directors• Disclosure– Quarterly SEC filings– Detailed review of operating results– Quarterly investor calls• Forecasting– Thorough– Precise– Conservative– Critical to always meet or exceed Streetexpectations – missing a quarterly earningstarget can reduce a company’s stock price by50% or morePrivate Company• Accountability– Management– Shareholders– Board of Directors• Disclosure– Summary results to shareholders– Management accounting• Forecasting– Primarily for budgeting– Missing budgeted numbers may impact bonuspayments but does not necessarily weaken acompany’s competitive positionMORGAN STANLEY DEAN WITTER4