What we do
We work with financial stakeholders to conduct reviews of the liquidity and related cash flow forecasts of borrowers, in order to understand and analyze the drivers of cash flow, e.g. trading performance, working capital, restructuring costs, or provision payments. This work requires us to assess, among other things, intra-month peak requirements, vulnerabilities, and potential upsides. This provides lenders with an independent view on whether their borrower has adequate liquidity to continue operating normally, thereby providing time for the lender to consider their options.
How we can help
We conduct high-level stress tests, and analysis of the borrower’s current financial position and business plan. We can help lenders take a view as to whether the business plan provides a reasonable basis for determining the debt capacity and making future lending decisions by:
- Analyzing the current financial situation;
- Analyzing the liquidity position to understand any short-term funding that may be required;
- Carrying out a review of the track record and normalizing one-off exceptions, in order to provide a basis to test and challenge the management’s financial projections and business plan;
- Assessing revenue, costs and cash conversion assumptions included in the plan, and commenting on their reasonableness, as well as using specialized Deloitte resources to review specific aspects of the plan (e.g. prevailing market assumptions, operational metrics/improvements, pension and tax);
- Performing commercial and market analyses to understand the competitive landscape and present position;
- Performing an operational review to assess the business model’s operating efficiency, including comparison with peers and areas to increase profitability;
- Performing a critical analysis of projections to form a view on potential vulnerabilities and upsides;
- Analyzing available restructuring options, and providing assistance in considering strategies aimed at reducing the financial leverage of the business.