Why? Because it must be established at the beginning of a restructuring report in accordance with IDW S6 whether the company in crisis is subject to (imminent) illiquidity and/or over-indebtedness. The most important foundations for this are a) financial status and b) financial planning derived from a meaningful business concept.
The calculation of the liquidity requirement for (at least) the current and coming business year that must be covered with overwhelming probability (= positive going concern forecast) and – in the case of a negative going concern forecast – the preparation of an asset status to allow evaluation of over-indebtedness.
Important note on the difference between “insolvency” and “payment stagnation”.
Caution! What follows is legalese:
“A mere payment stagnation is to be accepted in principle if the period of time a creditworthy person needs to borrow the required funds (financial gap) is not exceeded. For this it seems that three weeks are necessary, but also sufficient.”
If the insolvency grounds can be ruled out after the establishment of the company’s financial status, the drawing up of the required financial plan and the determination of a positive ongoing business prognosis, the task of actually restructuring begins with the drawing up of the restructuring concept .
Our turnaround experts will be delighted to explain to you in more detail how well we understand companies in crisis, the associated problems, and how we can usually solve them. Our success rate of over 90% and recommendation rate of 98% speak for themselves.