Schedule
Seminar: Friday March 18 and Saturday March 19, 2005
Friday, March 18, 2005
Businesses do not fail precipitously, and the symptoms of failure can be seen long before a crisis is reached. The only time a company has surplus cash is when being liquidated.
The seminar outline will be as follows:
Part I – Analyzing the underperforming company
- The Balance Sheet
- Balance Sheet Related Ratios
- Early signs of Deterioration-SYMPTOMS
- Falling current ratio
- Deteriorating liquidity (quick ratio)
- Increasing use of credit lines (increasing leverage)
- Income Statement
- Costs of Goods Sold
- Operating Profit (EBIT)
- Income Statement Ratios
- Early Signs of Deterioration: PROBLEMS
- Income Statement
- Key Operating Ratios-Use of Cash
- “Z” Score: a bankruptcy prediction model
An example using sample company information
- Trend Analysis
- Benchmarking
- Signs of Trouble: Crisis Phase
Part II – Restructuring the family business: Unique problems, complex solutions
- Why/When to Restructure?
- Required Resources
- Restructuring expectations
- Characteristics of the Family Business
- Difficult Competitive Environment
- Troubled Family Businesses:
- The Community Reacts
- Personal Risks
- Lessons Learned: You can not grow out of a crisis.
- The Troubled Business: Patterns of Deterioration
- Other Signs of Trouble: Crisis Phase
- VALUES of a Structured Workout
- Barriers to an Effective Restructuring
- The Restructuring Plan
- The Restructuring Process
- Defining the points of profit leverage
- Basic Analyses
- CASE EXAMPLE
- Top Issues Facing Company
- THE STRATEGY
- Refinancing
- Tracking the plan
- Human Complexities
Saturday, March 19, 2005
Part III – Reinvesting family assets in operating companies
- Investor Perspective
- Investment opportunities: need to manage complexity and risk.
- Risk characteristics of mid-sized companies:
- Incomplete information
- Limited risk evaluation
- Family Objectives
- The family investment statement.
- Decision criteria:
- Is final decision based on fact or emotion?
- Due Diligence
- Risk profile and quantifying potential risks.
- Lifecycle stage of target.
- Analytical tools:
- True cash requirements to meet investment objectives?
- Can expectations be met?
- Core Issues
- Operating and financial changes:
- Management decisions not based on knowledge of costs and understanding of cash.
- Future success relies on strategic shifts outside core strengths:
- Systems infrastructure.
- Management skill.
- Developing the Plan
- Risk Assessment
- Contingency Plan:
- Warning signs
- CASE EXAMPLE
Part IV – Governance
- Board of Directors
- Constituencies served
- Responsibilities
- Composition of the Board
- Independence of audit and compensation committees
- Director selection
- Legal Issues
- New York/International Stock Exchanges
- Independence of compensation committee
- Code of Business Conduct and Ethics
- Regulatory obligations
- Trust funds (employee taxes; sales taxes; pension contributions)
- Risk Management
- Active involvement in board affairs
- Proper oversight
- Fraud prevention
- Advisors versus Directors
Part V – Corporate fraud: Where to look?
- Reasons for the escalation of Fraud.
- Factors influencing discovery
- Invalid business plan.
- Poor performance vs. plan.
- Unnecessary complexity within the organization
- Complex supply chains.
- Unintelligible and late reporting.
More:
- Pre-conference workshop: “Strategic Management for Family Firms in Crisis: Improving Performance with Systems Thinking” — Wednesday March 16, 2005
- Conference — Thursday March 17, 2005
