Acting prudently and promptly – managing crises
Companies find themselves, particularly in economically difficult times, faced with numerous major challenges. Currently, internationalisation of economic activities, concentration in the markets, changed basic conditions and customer needs as well as the increasing shortening of product life cycles are in this context central subjects required to be mastered. For well-founded, future-orientated corporate decisions both an awareness of critical situations and the ongoing analysis of the company’s own areas of risk are in demand. Particularly in critical situations you can rely on the comprehensive experience of the corporate finance experts of the PKF network and above all on the committed action of our employees. For risk assessment an informative internal reporting system is necessary that records the effects of the changes in the business environment promptly and adequately maps them. This transparency helps to avoid crises.
Profound corporate crises do not as a rule arise suddenly, but develop over months or years with their own dynamics which can lead to an increasing explosive force going as far as insolvency. In this phase maximum attention must be given to crisis management. Effective crisis resolution now includes fast and simultaneously calm action. The basic prerequisites for the successful turn-around are correct dealings with stakeholders, direct availability of information relevant to decision-making as well as the immediate implementation of stabilisation measures.
Our aim is to recognise crises in your company in good time and jointly with you to respond appropriately and quickly to them.
Our teams help you with:
financial transparency and clarification of the present situation of the company
safeguarding the existence of the company
recovery and sustainable stabilisation of entrepreneurial efficiency
support with the implementation of the appropriate measures
Our services in the context of a restructuring / reorganization:
Integrated corporate planning
So that developments that threaten the company are identified as early as possible, prompt and informative internal reporting is required. The basis of this is a functioning controlling system that maps the business processes.
As indicators of early quantitative identification of impending corporate crises, in particular statements of profit and loss, of assets and liabilities and of liquidity based on historical and planning data are suitable. Therefore PKF's corporate finance experts concentrate on coordinating integral and flexible corporate planning with the other company sub-plans. Hence there is an opportunity to map major developments via appropriate financial key figures and to make the complexity of entrepreneurial action clearer.
One effective method of deriving viable decisions at the shareholder side and the provider of outside capital side is by means of sensitivity analyses and scenario planning, with which future success factors and payment flows are simulated.
Assisting with reorganisation
Reorganisation should not only have a view to the short-term survival of a crisis-ridden company, but should secure its sustainable competitiveness. In order to achieve this objective, a streamlined organisation and the implementation of a well thought-out project plan are necessary. For entrepreneurs that means a great challenge and particularly if these tasks have to be addressed alongside the operational business as such.
Our experts from the field of reorganisation are ready to assist you with all tasks relating to sustainable reorganisation.
What is involved here is the competent preparation of detailed catalogues of measures in which the steps towards the implementation of the reorganisation plans worked out are recorded, as well as purposeful reporting that helps to monitor and control the progress and results of the reorganisation.
A basic prerequisite for employing the available capital as efficiently as possible, is the setting-up of liquidity management which is exactly tailored to the specific situation of the company.
Moreover, focusing on target-orientated working capital management can indicate short-term room for manoeuvre and create more flexibility on the way to a successful turn-around.
Independent Business Review
Being able to fall back on transparent information is, particularly in difficult times, a basic prerequisite for investors. Therefore equity providers often, especially if compliance with financing agreement is endangered and adjustment measures are necessary, require taking stock of the financial data on an up-to-date basis.
An independent business review is a suitable instrument for independent analysis and presentation of the borrower's performance-related and financial parameters. It hence provides a meaningful decision basis for deducing concrete recommendations for action.
Our experienced team will advise you in connection with the preparation of an independent and comprehensive analysis of the company which makes it possible for all concerned to carry out a well-founded assessment of the risks and sets out the framework for action alternatives. On this basis, lenders and borrowers can reshape the financing structure and terms in accordance with their requirements.
Reorganisation in accordance with IDW S6
Particularly in periods of crisis, fast action is decisive for the continued existence of a company. In order to be able to make the right decisions, both the management of the company and the investors require prompt and reliable information on the company's financial and performance potential. Based on this, well-founded statements on the crisis-ridden company's capacity for restructuring are to be made.
An objective and independent statement on the crisis-ridden company's capacity for restructuring often, in particular in the liquidity crisis, presents the final opportunity for averting the impending insolvency and for encouraging all those involved to ensure the continued existence of the company.
The basis of the reorganisation is the restructuring concept and/or reorganisation survey. The purpose of this concept consists in showing, with reference to the basic legal conditions, in a conclusive and comprehensible manner, a way towards reorganising the crisis-ridden company.
A reorganisation survey by the PKF team of experts includes the systematic review of the economic starting situation. Central elements consist in analysing the causes and the stage of the crisis, presenting the new strategic orientation of the reorganised company and pointing to measures for overcoming the corporate crisis.
The integral business plan in particular serves as the basis for the assessment of the capacity for restructuring.