Case Studies

Management reporting  

A multi-channel equipment distributor had limited regular financial information other than cash balances and total sales.  Changes were made to the accounting processes,  record keeping and controls to allow management to see exactly how much was being sold though each channel and exactly what gross profit margins were being generated on a real-time basis.   The changes also allowed management to track the productivity of salesmen and service engineers. 

The additional information helped the directors to make business decisions which improved the operational efficiency and profitability of the business.

Having generated detailed information about the business's performance, a full year budget and cash flow forcast was prepared against which actual performance could be tracked. 

Transaction support

An expanding bar/restaurant chain was undertaking a fund-raising exercise with a private equity fund.  The finance team was already fully utilised managing the daily operations of this rapidly growing business and the transaction created a significantly greater workload.  Additional support was provided to assist the team with a commercial and financial overview of the proposed transaction, a review of the proposed complex banking arrangements,  technical advice on the reorganisation of the business into a new group, creating a process for monitoring ongoing bank facilities and bank covenant compliance, and creating models to forecast future business expansion.

Preparing group financial statements

A financial services group was required to prepare group accounts. In this particular year, the company had acquired subsidiaries, disposed of subsidiaries, and entered into joint ventures. Part-way through the year the group was restructured using a new parent company. The preparation of group consolidated accounts was particularly complex and beyond the expertise of the group's in-house finance team.

The required information was sourced, consolidation workings prepared and fully documented, and statutory accounts drafted. The auditors required no adjustments to be made to the reported figures.

Business plans and forecasts to support an equity investment

A property consultancy had sourced a joint venture partner but required a business plan to be drafted and and full financial projections to be prepared showing a variety of different scenarios.   The directors were advised on the structure and content of the business plan and assistance provided to prepare it.  Financial projections were prepared which identified a number of potential issues.  These include a disparity in the level of investment return for each of the partners.   Several different scenarios were demonstrated using a flexible projection model.   Based on the business plan and the financial projections, the joint venture partner chose to invest in the business on terms acceptable to both parties.

Family succession    

The owner of a family business wished to pass on an interest in his company to his children in a way that a) allowed him to retain full control and b) continue to remunerate himself appropriately, until such time that his children were making a full contribution to the business.  It was key that the transfer was tax efficient.  A variety of different options and issues were explored and ultimately a new class of shares was established.  No tax liability arose.   

Risk management

A client was about to embark on a programme of opening overseas offices and the Board were concerned to properly understand the potential financial risks involved.   A discussion paper was produced and a discussion led amongst the Board around the key financial and tax risks the company would be exposed to in relation to the expansion.