Viability review

Viability reviews have been developed by Grant Thornton to assist companies facing financial difficulty. The reviews can be initiated by any stakeholder with a direct interest in the financial position of a company e.g. directors, lenders, bankers or shareholders.

Goals and Objectives
The goals and objectives of the viability review process are to:

• work with management
• establish the severity of the current financial position
• identify what steps can be taken to alleviate the financial pressures being placed on the business
• identify what additional resources may be required by the management team
• prepare a list of recommendations and conclusions
• oversee the implementation of the recommendations where agreed and accepted by the company; and

should the most appropriate solution be some form of winding up, to ensure that a suitable recommendation is made.

How does it work?
A team of Grant Thornton's qualified professionals will:

• visit the company's premises
• examine the financial and trading records
• clarify the current financial position
• review any trading and cash flow budgets and challenge the assumptions underlying these projections forming the basis of these budgets
• discuss the findings with management and develop a series of conclusions and recommendations regarding the way forward.

What is the output?
A report or presentation will be prepared summarising our findings and conclusions and providing our recommendations as to the way forward. Where reports have been commissioned by lenders certain sections of the report, particularly those regarding bank security, may not be shared with the management of the company.

What does it cost?
The costs of the assignment are normally agreed prior to commencement and can be structured on the basis of a fixed fee or alternatively on a rate per hour basis. Two of the main factors influencing our fees are the quality, reliability and availability of accounting information and financial data and the resources we are required to devote to the assignment.

Do I need a review?
Your business or that of a client could benefit from a viability review if the business:

• regularly exceeds its overdraft limit
• has difficulty raising cash to pay wages on time and has exhausted all immediate sources of funding
• is exceeding payment terms to trade creditors and has received numerous official requests for payment
• is incurring significant and regular trading losses
• is not producing accounting and trading information for key stakeholders on a frequent and regular basis