Financial Status and Source of Earnings Analysis
When creating restructuring concepts, HANSE Consulting always applies a holistic approach. This includes conducting a source of earnings analysis to answer the question of how the company is really doing.
To successfully manage a crisis, there needs to be clarity and certainty about which (financial) funds are available to combat the crisis in the first place.
According to the IDW-standards of restructuring assessments, the financial position and performance of the company must be recorded first, while its further development must be estimated after that, without implementing any restructuring measures. Chances and risks need to be taken into account aswell. These can be identified by conducting a market and sector analysis. All other influences relevant to the development of the financial position and performance of the company must be taken into account, too.
Valid Reporting for a Clear View
A management result account is a vital tool that is used to analyze the financial success of individual business units. During a restructuring process, it is key to compile the management result account quickly, within a few weeks, because all stakeholders are under pressure to take action and in need for information. Furthermore, they need to decide on measures to safeguard liquidity.
Most companies in critical situations do not have sufficient financial reporting. That is why it is necessary to implement reliable accounting tools in the medium term as to sustainably ensure the survival of the company:
- Unit cost calculation
- Cost center accounting / cost apportionment statement
- Profit center accounting