DUE DILIGENCE

Lenders, creditors and equity investors make critical decisions with each capital commitment – decisions that can put the entire funded amount at risk. Brandlin & Associates’ Due Diligence Services ensure that a disciplined and comprehensive evaluation is conducted before the money goes out the door.

We scrutinize the variables that affect a company’s future performance, financial reporting and credit quality. With experience that covers a broad spectrum of unusual and unexpected situations, our team enhances each client’s risk management efforts. In fact, when we encounter unexpected outcomes, we propose alternatives to enable the parties to achieve an agreeable transaction structure and may provide advice to implement necessary financial or operational changes.

CASH FLOW TRANSACTIONS:

B&A assesses the likelihood that a company will generate sufficient cash flow to meet its obligations. Our examination includes:

  • Projected and historical cash flows
  • Assumptions for financial projections
  • Accounting and reporting systems
  • Internal controls
  • Reporting compliance
  • Business trends
  • Managerial depth
  • Change of control provisions

ASSET BASED LOANS:

B&A analyzes a company’s cash flow and collateral support for lenders. We evaluate:

  • Collateral eligibility and value
  • Asset performance
  • Historical trends
  • Pro Forma borrowing bases
  • Borrowing base structures
  • Internal controls
  • Reporting compliance

PORTFOLIO COMPANY REVIEWS

Timely information is mandatory for capital providers to ensure their loans and equity investments remain sound. Brandlin & Associates’ Portfolio Company Reviews help debt and equity participants monitor individual companies and entire portfolios. We test the key drivers of cash flow, collateral value, compliance and investment requirements. Our clients depend on us to uncover the facts behind the financial statements and related reports.

B&A’s thorough analysis includes:

  • Actual performance vs. budgeted performance
  • Validity of operating assumptions and financial projections
  • Business trends
  • Reporting compliance
  • Internal Controls
  • EBITDA calculations and adjustments
  • Collateral eligibility and quality
  • Dilution of collateral
  • Advance rates against collateral value

PRE-SALE PLANNING

Business owners can improve the chances of a successful sale of their company, and mitigate the chances of post-closing disputes, by thoroughly assessing the areas that buyers consider in due diligence prior to going to market. Brandlin & Associates’ Pre-Sale Planning Services involve a thorough assessment of the financials, operations and management, greatly improving the company’s ability to pass a prospective buyer’s scrupulous due diligence.

We apply experience gained from conducting hundreds of due diligence and dispute resolution engagements on behalf of financial and strategic buyers. Working in conjunction with our client’s investment banker/broker, or before an intermediary is retained, we thoroughly assess and are available to help remedy deficiencies in areas including:

Financial

    • Accounting systems, policies and procedures
      • Revenue recognition and costing methods
      • Consolidated and detailed gross margin analysis
      • Integration of operational and accounting software
    • Historical financial statements
      • Consistency of EBITDA over comparable time periods
      • Preparation in accordance with GAAP
      • EBITDA calculations and adjustments for non-recurring items
      • Purpose of related party relationships
      • Impact of under or over-market related party transactions on EBITDA
    • Accounts receivable and sales
      • Terms, aging and quality
      • Customer concentrations
    • Inventory valuation and costing methods
    • Accounts payable terms and aging
  • Financial projections and related assumptions
    • Quality and dependability of operations, future cash flows and
      financial positions
    • Capital expenditures & deferred maintenance

Operations

  • Evaluation of managerial depth
  • Internal controls
  • Reporting compliance
  • Process improvement and re-engineering
  • Human resource management

Market Position

  • Business trends
  • Competitive assessment
  • Market evaluation and demographic reviews
  • Performance benchmarking