Transaction Analysis + Modeling
Many business transactions are structured based on an understanding of the basic concepts of the deal, arrangement, or agreement. The business deals done today are often complex and require analysis of numerous variables. For example, consider the profit allocation provisions a partnership agreement. Such provisions may include multiple tiers of preferred returns, different classes of interests, special allocations of profits or deductions, regulatory allocations for assets with pre-contribution gain or loss, guaranteed payments, deductions related to nonrecourse debt and so forth and so on. Moreover, profit allocations can occur before or after the corresponding cash distributions, which may result in “phantom income” allocations.
Trying to decipher the economic and tax ramifications of complex partnership arrangements is nearly impossible without a computer spreadsheet model, which is where we can help. Using projected income and balance sheet data over a multiple-year period, we can prepare a “what if” spreadsheet-based analysis that will show you an estimate of the income, loss and cash that you can expect to receive over the life of the partnership. This information can help you to plan for events such as allocations of “phantom income” as well as assess the overall deal structure and whether such structure is a good fit for your investment risk tolerance level.