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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
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$10MM Senior Loan to $124MM Manufacturer
Saved company about $1.0MM in tax liability by evaluating capitalization policy of manufacturing overhead. Assisted in search for new outside accountants.
$20MM Equity Investment in $118MM Computer Company
Determined accounts receivable reserve understated by $2.3MM and material weaknesses in internal controls and financial personnel. Created and implemented new financial reporting procedures.
$8MM Equity Investment in $75MM Distributor
Discovered inventory reserve understated by $1.1MM, deficiencies in operational inventory reports and errors in accounting practices. Recommended changes to improve inventory turnover.
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