Question: After the initial due diligence phase for HealthTech Solutions, you are given a detailed revenue breakdown for each segment, but the cost structures are aggregated
After the initial due diligence phase for HealthTech Solutions, you are given a detailed revenue breakdown for each segment, but the cost structures are aggregated at the company level. Considering the distinct nature and challenges of each segment, how should you approach constructing the operating model for HealthTech Solutions? Allocate all costs proportionally based on each segment's revenue contribution. Allocate all costs evenly across all segments, assuming each segment has an equal cost structure. Ignore the cost breakdown for now, and focus only on top-line growth metrics, given that they are more important for valuation. Construct a detailed cost allocation framework, making informed assumptions where segment-specific data is missing, and validate these assumptions with the target's management.
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