Directors must have a clear and unambiguous understanding of the financial position of the company if they are to make an informed choice about their options.
In many cases only a limited financial analysis is needed in order to decide on options.
In other cases a more comprehensive analysis is needed. The Gore & Company Business Review is a service aimed at companies that are experiencing financial difficulty and who wish to obtain a better understanding of the financial position of the business and the true extent of financial difficulties. Ultimately this will lead to the development of a plan for dealing with these problems.
A Review will typically include the following general work:
Balance Sheet Review: To establish the true financial position at the most recent date taking account of:
- The current value of land, buildings, plant and machinery and stocks
- Liabilities not included within the balance sheet such as leases
- The recoverability of debtor balances
- The current value of creditor balances
Review of Operating Results: To establish the short term trading forecast and the prospects for using ongoing trading receipts to manage financial difficulties.
Preparation of a Short Term Cash Flow: The business in difficulty requires an urgent and accurate short-term cash flow forecast that it can use to trade out of its difficulties.
This forecast will set out in detail, the receipts and payments the business expects to make and how it intends to trade within its financial resources.
Without this statement, no business in financial difficulty can hope to survive.
The Review will form the basis of a plan for recovery and enable the business to trade out of its difficulties possibly with the support of its bankers and investors.
A well developed and well managed plan will enable an owner manager to reduce the extent and amount of personal guarantees given to banks, landlords and other suppliers of goods & services.
Directors should always consult a Licensed Insolvency Practitioner as soon as they become aware that their business is in financial difficulty. Gore and Company can complete a rapid review of the business and advise on the most appropriate course of action.