Evaluating your existing financial situation and restructuring debt is another tool of profit improvement. Brown Smith Wallace has the expertise to provide consulting in the following areas:
During distressed times your business may have a tendency to look beyond your asset base and focus on short term initiatives, primarily sales and cutbacks. As a result, your asset base could deteriorate. Therefore, it is prudent to review and analyze your company’s balance sheet over a five year period by doing ratio analysis and analyzing the overall financial fitness of the company.
You and your business are unique, therefore you should not settle for an off-the-shelf retirement plan. Benefit Plans Plus, an affiliate company of Brown Smith Wallace, develops custom design retirement plans based on your unique demographics, financial resources and business philosophy. Multiple options are designed to maximize the value for both the employer and employee. This results not only in maximized savings opportunities, but also in significant pre-tax and after-tax-saving advantages.
To help companies looking to strengthen their financial position, Brown Smith Wallace has developed the Business Health CheckupTM. Our tool provides companies with an assessment that identifies opportunities for cost control and reduction, process improvement, tax and estate planning, along with financial analysis and structuring. From this assessment, we can help you develop a step-by-step action plan that can be the foundation of your company’s long-term success and enable the business to effectively move forward, even in a challenging economic environment.
If your company is taking advantage of acquiring distressed companies, you will need to allocate its purchase price among the acquired assets. We can help you perform the required FAS 141 valuation.
If you are a small business owner, you may want to gift shares in the company to children or employees if the value of the business is at a depressed level. Keep in mind that the value will only be depressed, however, if long-term cash flow is negatively impacted and not just experiencing a temporary downward trend.
Performing a captive insurance company analysis will assure your captive meets the criteria to qualify as a captive insurance company for tax purposes. We can analyze the necessary areas to determine your qualifications or determine what steps should be taken to prevent the loss of potential tax savings available to captive insurance companies. Areas required to meet specific criteria are:
- Captive’s primary business
- The risks being insured
- Shifting risk
- Risk distribution
- Types of captive transactions
In this distressed time, Brown Smith Wallace can evaluate your financials to assure you that your company is remaining strong and is not overleveraged. You want a capital base that is sufficient to fund and/or obtain credit to fund your future operations.
During depressed economic conditions, we have seen increased embezzlement. If management suspects fraud, we can investigate and quantify the magnitude of any such fraud.
Goodwill Impairment Review
With depressed economic times, the value of previously acquired goodwill may decrease. If that fair value decreases below its recorded value, a charge against earnings must be taken. Alternatively, if your company is publicly traded and already seeing a drop in its share price, you may want to be aggressive in booking such a charge. In any case, we can perform the required FAS 142 goodwill impairment test that must be done annually for GAAP purposes.
Merger and Acquisition Consulting
Even during distressed times there are business opportunities that arise. Often, as companies weaken, opportunities arise relative to a merger or acquisition. This is generally a great way to acquire marketshare and good people that may not otherwise be available. We can evaluate merger and acquisition opportunities that fit your specific needs.
Troubled Debt Restructuring
When companies get financially stressed, they generally become overleveraged and begin to get pressure from their lenders. As a result of this pressure, the company may be put in the special assets group of the bank (workout). Once the company is assigned to this section, they are generally classified as a troubled credit account and will be requested to find another lender or have a turnaround consultant come in to help manage the company or both.
We can help you analyze the special lenders, mezzanine players and venture capital groups that specialize in these types of credits. There is a substantial analytical process needed to determine the viability of a company and then determine which lenders may be available as a potential resource.
Working Capital Review
Working capital is one of the lifelines of your company. It is important that a company understand its working capital needs and the dynamics of its components.
An analysis of working capital should be made over several year ends as well as month to month for at least a three year period. This will help your management team understand the line of credit needs your company has on a monthly, annual or seasonal basis.