Ledger Validation

Problem

One of Australia’s largest corporate advisory firms (“the advisors”) were engaged by an international Private Equity group (“PE”) to assist them with the purchase of an Australian and New Zealand business (“the business”).

Key to the purchase was the quality and collectability of a $26M debtor book.

WTC was engaged by the advisors to urgently review the debtor book and to form an opinion on the level of debtor realisations.

Given the sensitivity of the transaction WTC undertook the assignment working remotely, with no direct interaction at all with the business subject to sale.

Approach

  • Initial discussion with a director of the advisors to obtain background information.
  • Review of debtors ledger of seven thousand debtors with a book debt of $26M focussing on ageing profile, payment patterns and customer base.
  • Line by line review of the Top Two Hundred debtors representing 75% of the total ledger.
  • Prepared a series of debtor questions for the advisors to raise with the CFO of the business.
  • Reviewed the answers given by CFO.
  • Formed an opinion on the collectability of the debtor book.

Outcomes

Sharp concise exercise carried out and opinion on the collectability of the debtor book given to the advisor within twenty-four hours of accepting the assignment.

Comments are closed.