Questions for Managers

In my continuing series, here is another set of questions that, if I were hiring a manager to run a business I either owned or had a fiduciary duty to operate, I would ask.

Can you explain to me how you would estimate the value of this company?  Can you give me an example of how you would do that?

Say you were managing the business and you were evaluating whether to acquire a company or not.  Step me through how you would make the decision and how you would determine how much you would be willing to spend to buy the company.

The purpose of these questions is to determine what the candidate thinks are the key value drivers of the business.  I personally would be looking for a candidate that could explain that the company’s value is the present value of future cash flows and their job is to produce reliable, strong cash flow.

I’d be leery of candidates that veered off explaining how value is based on things like market share, number of transactions and “getting the story out”.

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1 thought on “Questions for Managers

  1. Pingback: Exercising Tact and the Employee Bonus | Employees Bonus

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