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Diagnosing the cause of underperformance

For an organisation to successfully restructure its business to improve performance, it must first understand the causes of the problem. Our restructuring team can rapidly diagnose the causes of underperformance using our unique Business Diagnostic approach.


Our business diagnostic approach enables us to:

  • gain an in-depth understanding of the company’s commercial and financial position
  • identification of cost reductions
  • identification of quick wins to improve performance


Our approach assesses:

Profitability analysis

  • historical trend analysis, comparison against forecast of sales, margins, earnings, etc.
  • review of any unusual/unexpected movements in share price, trading results, etc.

Customer & product profitability

  • identify unprofitable products and customers
  • understand the company’s customer base, their expectations and perception of the company’s business
  • understand the company’s product-market strategy

Management skills and processes

  • management workshops to identify key issues
  • review background/experience of management, current responsibilities and reporting structures, management turnover
  • review role of board and level of involvement in day-to-day management

Funding structure

  • review funding structure (ie: debt/equity) to ensure it is appropriate given the company’s turnover, bank covenants
  • explore options for increased capital injections from current/new stakeholders

Surplus assets identification

  • identify assets which unnecessarily tie up working capital and that can be readily disposed of, bearing in mind the security position of banks/other lenders
  • consider options such as sale and leaseback of equipment, vacating unused premises, etc.

Contact one of our  Corporate Reorganisation partners for more information

Contact us for more information about this topic.
 
 
 
     

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