ERNEST HEMINGWAY ONCE WROTE THAT THERE ARE TWO WAYS TO GO BANKRUPT: FIRST GRADUALLY, AND THEN SUDDENLY.
In the same way, the restructuring path follows two time horizons:
- In the short term, stabilizing the business by assessing the current liquidity position and the runway necessary to complete the restructuring
- In the long-term, recapitalizing the company and improving its performance.
During early turnaround situations (e.g., first covenant breach or missed payment), firms typically don’t have the internal resources or expertise necessary to develop and execute a restructuring plan with the quick turnaround that is typically required.
Hiring dedicated restructuring professionals gives management the opportunity to focus on the daily operations and successfully execute the business plan, while also providing other stakeholders (e.g., shareholders, board, lenders) the additional reassurance that the process is managed by a trusted, independent party with previous experience in these extraordinary circumstances.
Sapling works with mid-market firms and turnaround consultants in restructuring situations to offer best-in-class financial modelling and data analytics, thus enabling management and CROs to spend more time on higher level items, such as decision-making, negotiations with lenders, changing management, and improving performance. We have the expertise to offer these services with quick turnaround times to support successful turnarounds and provide solutions during times of insolvency. We are also able to support turnaround consultants during times of limited capacity by offering our services as a third-party to increase their bandwidth while still providing Partner oversight to maintain quality control.
Thirteen-Week Cashflow Forecast
- Building a model to assess the company’s current cash and liquidity positions, and observe whether there are improvements over time
Loan Covenant Stress-Testing
- Modelling the company’s loan covenants, as well as any terms arising from forbearance agreements and waivers, and stress testing to what extent the company can satisfy them under changing circumstances
Sale of Business Model
- Building an M&A model reflecting the terms of prospective buyers, and evaluating the company’s need for equity
- Building a financial model that assists the company in the decision to divest an asset or business that contributes insufficient value to the company’s core operations
- Building a bespoke bottom-up financial model forecasting the operations of the business from a revenue and cost perspective, which assists management and operations staff with executing their business plan
- Building a costing model that assigns overhead and indirect costs to products and services, thus fully costing the products and services and assisting management in making decisions on eliminating unprofitable products, divisions, or business lines
Financial & Operational KPIs Reporting
- Building automated dashboards that combine operational, financial, HR, and sales data, to assist management in gauging the company’s overall performance
Budget vs. Actual Variance Reporting
- Building automated dashboards or spreadsheet templates that assist management with the automation of variance analysis reporting on a monthly or quarterly basis
- Running profitability analysis on large data sets to determine top (worst) clients or products from a profitability perspective
- Business Plans
- Data Analytics
- Due Diligence
- Finance Automation
- Financial Analysis
- Financial Modelling
- Financial Services
- Health Care Services
- KPI Reporting
- Model Audit
- Model Building
- Operational Tools
- Private Equity
- Project Modelling
- Quality of Earnings
- Real Estate
- Renewable Energy
- Template and Process Design