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It is necessary to consider the conflicting existence of such conditions so that suitable
procedures can be introduced. Sarbanes-Oxley also forbids public corporations from expanding
or retaining, to or for any board member or executive officer, debt in the shape of a personal
loan.
Consequently, sufficient steps should be taken to guarantee that all such agreements can be
terminated before the IPO.
4.3.7 Financial Planning and Analysis
As part of their IPO readiness assessment, organizations need to develop budgets and
measure performance.
Underwriters will press for financial forecasts during the IPO process and will connect the
historical success of an organization to its previous budgets. Therefore, to have a budget and
forecasting mechanism in operation, a business should set up a financial planning and analysis
team.
In developing practical budgets and revised projections, the organization should be able to
express why deviations have occurred. The most significant performance metrics for an
early-stage company are forecasts and profitability.
Budgets and estimates will become a valuable tool for investment analysts after an
organization goes public. In addition, this data and the willingness of a public corporation to
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