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In a perfect world, every equity investment or loan would result in a healthy ROI without any hiccups. However, there always are underperformers. These companies can be black holes for time, consuming a disproportionate amount of resources for a sub-par return. What can the investor do in these situations?
When a company is underperforming, it typically means one of three things:
The difficult part is drawing the line from the poor results back to the source and then putting an action plan in place to remedy the situation. First, a thorough evaluation should be conducted to assess the operational processes and how they are contributing to the less-than-stellar financial statements. While business trends, internal controls, inventory, and accounts receivable collectibility are obvious things to assess, it is just as important to consider the validity of the operating assumptions and financial projections. We have uncovered some surprising results in performing portfolio reviews for our clients, including:
We don't stop with simply identifying the problems - we help our clients take action to put their portfolio companies back on track to meeting, or even exceeding, expectations. Sometimes, it is as simple as implementing operating and financial procedures. Other times, a protracted turnaround, with or without a bankruptcy filing, or litigation is in order. Whether a quick fix or interim management is needed, Brandlin's experts lend their practical experience to yield positive results.
Brandlin & Associates is an exclusive provider of investigative accounting, financial consulting and strategic consulting services. We pride ourselves on offering superior technical expertise, years of practical experience and unparalleled service to decipher financial and operational performance metrics. As a result, our clients are able to make informed decisions in a timely manner. |
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