Does your company need financial restructuring?
There are many factors that affect a company’s ability to remain profitable. As hard as financial teams and management try to keep a business on track, there are many things that cannot be predicted. Markets naturally rise and dip, new technologies gain momentum almost overnight, and consumer wants and needs evolve with time. Every company has to evolve with external factors in their environment, but sometimes drastic measures are necessary to get a company heading toward profitability again.
Financial restructuring is one very viable option for struggling companies. It is a strategy for getting a company back on track financially.
Why do companies restructure financially?
Most companies have to financially restructure at some point in time. In fact, it is not only for those who are struggling. Many healthy companies endeavor to restructure their business to proactively anticipate and avoid potential problem sources and to take advantage of opportunities to save money. A company may restructure in order to reallocate resources for a new campaign or product.
Restructuring is also necessary when companies merge with or acquire another company. Mergers and acquisitions can even be means of financial restructuring. For instance, a company with a low debt-to-equity ratio may join with one that has a high ratio in order to restore balance.
Any and all of these options should be discussed with professionals who have extensive experience in this area. Not all of these options will be right for you. At Day Rettig Martin, P.C. in Cedar Rapids, Iowa, we will analyze your company’s specific financial situation and lay out your options for you. We will do everything we can to keep your company profitable. We will customize a strategy based on your unique wants and needs.
To begin working towards a solution for your business, contact the attorneys at Day Rettig Martin, P.C. today.
Different Ways to Restructure Financially
There are different ways to restructure a company financially. Your entire strategy may include all of these things, a combination of two or more, or just one. Ultimately, the goal of restructuring is to reduce a company’s costs and to increase net profitability.
One way to save your financial situation is to restructure your debts. You might do this by attempting to renegotiate with your creditors to reduce or eliminate some of your debts. Oftentimes, creditors will lower interest rates and/or extend your repayment schedule. They may even forgive you entirely of a particular debt in exchange for equity.
Equity restructuring is another way to pull a company out of extreme debt and unprofitability. If you have assets that are not bringing in much if any profit, you may want to consider selling those assets to bring in some money. Another example of equity restructuring is writing down assets so they appear as expenses on your income statement. This can lower the amount of taxes you must pay. Equity restructuring can be a very beneficial move for some, but you must watch your capital very closely when doing so. Your assets must be able to cover your liabilities, however; therefore, you may need to raise your capital from other sources in order to avoid being forced into bankruptcy or a forced merger.
You may also need to restructure your operations. By reorganizing the departments and positions within your company, you may be able to eliminate wasted efforts and increase efficiency. Operational, or corporate, restructuring may mean downsizing as well.
What are some signs you need financial restructuring?
As previously mentioned, many companies that are financially stable go through restructuring, but it can often be harder to see the signs of trouble. Why? You simply don’t want to see them. These are just a handful of the signs that your company is financially unstable:
- It is hard to pay creditors because cash flow is tight.
- You are facing business bankruptcy.
- You have had extended periods of unprofitability.
- You are putting out more fires than attending to the daily workload.
- Your bank refuses to provide you a loan.
- Your employees always seem to have low morale.
- Your cash flow problem seems to hinge on the next big sale, contract, or payment.
At Day Rettig Martin, P.C., we realize that our clients have assets to protect, and that means you. We work day in and day out to protect your assets for you. This takes exceptional listening and strategizing, and we have been doing just that since 1879.
The future of your company is at stake. You need to know that it is in the hands of those you can trust. Let us put our legacy of trusted care to work for you.
Need a Bankruptcy Lawyer?
Sometimes bankruptcy cannot be avoided. In fact, bankruptcy can be a very powerful tool and indeed may be the only way to turn things around for your company. At Day Rettig Martin, P.C., we also guide corporate entities through the bankruptcy process from start to finish. Contact one of our bankruptcy lawyers today for the advice and representation you need.