Independent Business Review (IBR)
What is an Independent Business Review?
When a business is showing signs of financial stress or distress, a shareholder, investor or lender may request an Independent Business Review (IBR) to gain assurance on the current status of an enterprise and its prospects before continuing with or increasing their support. Directors and trustees may also request an IBR as part of their fiduciary duties. An IBR takes the form of an in-depth review, by an independent party, of the business’s strategy, business plan, operating environment, extent of distress, key risks and financial/cash flow outlook. It should include a detailed analysis of historical financial trends, allowing the reviewer to pinpoint the root cause of the business’s financial distress.
How do we do it?
We engage with the party requesting the review to understand their concerns, and with the enterprise’s management and/or shareholders to understand their views as to the causes of stress or distress. A detailed analysis of historical financial trends is then undertaken, allowing us to pinpoint the root cause of the business’s financial distress in order to corroborate the views of management and/or shareholders. The review will consider amongst other things the appropriateness of the enterprise’s business plan and strategy in the context of the current operating environment.
The review can be tailored to stakeholder requirements, but typically includes the following:
Detailed financial trend analysis, or “LTM” analysis covering income statement and balance sheet
In-depth understanding of the industry and business model, involving independent industry experts if required and appropriate
Review of key contracts
Assessment of key management skills and experience, inter alia to identify possible shortcomings
Consideration of major risks to the business’s outlook
In-depth interrogation of cash flow forecasts
Compilation and presentation of a detailed report that sets out our findings and recommendations.
Why EBT?
Engaged has considerable experience in assisting distressed companies, and a network of trusted technical skills across industries. We have resources that are professionally qualified in the areas of finance, management, operations, and law coupled with many years of experience at the coalface of distress and turnaround. These qualifications and experience afford us a deep understanding of financial distress and what is required to alleviate it. We provide deep insight and clarity to investors, lenders, directors, and trustees where there is uncertainty or concern around an enterprise’s financial outlook.
Is this the right solution for you?
An independent business review is normally requested at the behest of lenders, investors or persons with a fiduciary duty. The findings and insights produced during our independent business review are inevitably of significant benefit to all stakeholders of the business.
Give us a call for a no-obligation high-level confidential discussion on how best to proceed.