When a company experiences liquidity problems, there is likely to be a significant risk of breach of lending covenants; indeed a breach may have already occurred.
Initially it is vital to regain control of liquidity to provide a stable base on which to operate and the journey back to profitability is a structured and methodical process that requires a considerable investment of time and expertise to ensure clarity and understanding by all involved.
Commitment from the top down is essential; without the engagement of all stakeholders, the plan for corporate turnaround may not succeed. To first stabilise, and then revive, a business in distress our specialist advisory team will engage to assess as quickly as possible the current financial position and identify the options available.
Access to reliable information in respect of all business areas is crucial when considering and then securing a company’s survival. Our analysis will enable the business critical and key issues to be identified, for example where cash may be diverting unnecessarily, and allow resources to be directed to those areas fundamental for survival, and ultimately growth.
Our team are turnaround specialists with an extensive track record of successful corporate transformations. Common steps used by our team in the turnaround process include:
Indications that a business may be failing are many and varied. It can occur almost unnoticeably, for example as a result of a slow erosion of profit margins over a long period of time, low but consistent cash shortfalls, or the gradual stretching of creditors.
More obvious signs of failure can include the loss of a key customer causing a steep decline in performance, or a disruptive element in the market compromising the company’s ability to compete.