insolvency & Restructuring

If you’re not new to the corporate world, then by now you must have heard of the term restructuring and insolvency. If not, then don’t worry, as in this blog we’ll be discussing this subject in detail.

What is Insolvency? 

The law of insolvency is pretty easy to understand. It states that the individuals and organizations that are in an economic struggle and aren’t able to repay their debts may go into the proceedings of insolvency.

In insolvency proceedings, legal actions are taken against the insolvent organizations (entities that are in a state of insolvency). In order to pay off the debts, they owe to banks and other investors, the assets of these entities may be liquidated, in turn, relieving the institutions of their outstanding financial liability.

What is Restructuring? 

Before a business or an entrepreneur gets involved in insolvency proceedings, they go through a process called restructuring. 

It’s basically a practice of negotiating and settling financial issues and debts outside the court, without the legal proceedings. In such scenarios, a meeting between the insolvent entity and the creditors take place, where alternative repayment schedules are suggested and discussed.

Even though restructuring and insolvency are rather unfortunate state of events, you’d be surprised by how often businesses have to deal with it. 

Almost every company in the world, at some point in time, has to face an economic setback. However, the important thing here is to understand the depth of this crisis and come up with methods that can help your business come out of this situation with as little damage as possible.

We, at ThomasRoss Financial Group, have years of experience under our belts in devising plans that help companies restructure their brand without losing important assets in the process. Our team of professional financial and strategic planners provides excellent business valuation services. With the help of this service, they form schemes that prove to be extremely beneficial for the business owners in the long run.

What is Business Valuation? 

The simple process of evaluating the financial value of a company is called business valuation.

This concept of determining the economic worth of a company can be used for a number of reasons, such as collaboration with another company for partnership, taxation, figuring out the sale value of a business, divorce proceeding, and insolvency and restructuring.

Business valuation isn’t something that is achieved through one particular method. It utilizes expert judgment, relevant information, and years of experience. Hence why, you need professionals to figure out the worth of your business.

How Does Business Valuation Help with Restructuring and Insolvency? 

Regardless of whether you and your company are facing restructuring or insolvency, you would be required to present your creditors — banks and investors, with statements and reports of your company’s current worth.

Business valuation assesses a company’s finances as well as assets in order to determine the present financial worth of the business.

The current worth is required in the case of restructuring and insolvency because the creditors need the financial worth of your current assets, in order to determine the method through which you’d be repaying the debts you owe to them.

How Do Financial Planners Help Resolve Restructuring and Insolvency? 

The course of actions taken by our financial and strategic planners varies on the situation.

In the Case of Restructuring 

• They examine the case and determine the severity of the crisis.
• They shine a light on the available options and devise schemes that help their clients choose the most beneficial path for them.
• They investigate the balance and financial sheets of the insolvent company and help their clients decide which business aspects of their company need to be shut down, in order to regain the lost economic balance of their business.

In the Case of Insolvency

• They provide assistance with insolvency filings.
• They work closely with the insolvency officeholders (administrators and liquidators) and accountants.
• They offer guidance to the directors of the insolvent companies by explaining their roles to the creditors. 
• They provide assistance to the insolvent company with the sale of assets or mergers and acquisitions.
• They guide their clients in insolvency litigation and appeals.
• They offer advice to their insolvent client on liability management and methods to overcome insolvency proceedings. 

Which Other Situations Require Business Valuation?

Business valuation services aren’t just utilized in the case of restructuring and insolvency. There are other scenarios where you could be required to present your company’s current worth. Here are a few examples:

• Buyouts
• Estate Planning 
• Divorce Proceedings
• Gifting
• Financing
• Mergers & Acquisitions

Even though a situation such as restructuring and insolvency can seem rather drastic and immensely damaging, with careful planning and meticulous scheming, it’s possible to overcome it without losing everything. If you need financial and strategic planners for business valuation services in New Jersey, then don’t hesitate to contact us at ThomasRoss Financial Group.

Financial Statements analysing

The process of reviewing a company’s financial reports in order to determine its economic situation is called financial statement analysis. The results can be used for several review purposes such as cash flow, company liability, assets and inventory. It’s also used to identify and determine the future plans and strategies and while seeking investment capital.   

For most business owners, analyzing financial statements might seem overwhelming. Hence why, hiring professional business and financial analysts is something all entrepreneurs should consider. We, at ThomasRoss Financial Group, provide just that! With us, you can avail excellent business valuation services New Jersey . 

In this blog, we’ll discuss the different methods of financial analysis in depth in order to help you understand the concept thoroughly.

Methods of financial statement analysis 

When it comes to analyzing financial statements, there are two main methods:

1. Horizontal and vertical analysis

The process of comparing economical information collected during several different reporting periods is called horizontal analysis. In simple words, the process of reviewing the outcomes of numerous time periods is horizontal analysis, whereas, the proportional analysis of a financial report is called vertical analysis. In other words, the process of reviewing the proportion of accounts to one another during a single period is called vertical analysis. 

2. Use of ratios

In order to calculate the comparative portion of one number in regards to another, different types of ratios are used. You can compare the ratio calculated for a particular period with the ratio calculated after the said period to observe whether a company is performing well or not. Most of the times, a basic financial statement analysis will showcase most ratios to be within expectations. However, at times, a small percentage may have certain errors, which would require a reviewer’s attention. Different types of ratios are used to determine different parts of the performance of a business.

If you’re looking for business valuation services New Jersey, then ThomasRoss Financial Group is your best bet!

The basic groups of ratios are:

2.1. Liquidity ratios

Liquidity ratio is one the most radically essential set of ratios. This is because they calculate the potential of an organization to survive in the business world. The following are the ratios that fall under liquidity ratios: 

Current ratio

It calculates the amount of liquidity accessible in order to pay for present-day liabilities.

Cash coverage ratio

It determines the amount of cash accessible in order to pay the interests. 

Liquidity index

It calculates the time needed to turn assets into cash.

Quick ratio

It’s similar to current ratio but with one exception — it doesn’t calculate the amount of liquidity accessible in order to pay for the inventory.

2.2. Activity ratios

This set of ratio is extremely useful as they can determine the quality of management of a company. With the help of these ratios, one can determine how well a company’s management is utilizing its resources. The following are the ratios that fall under activity ratios.

Accounts receivable turnover ratio

It calculates how well a business is able collect the accounts scheduled for it to receive.

Fixed asset turnover ratio

It calculates how well businesses can generate sales from its fixed assets.

Sales to working capital ratio

It determines the amount of working capital needed to assist a given levels of sales.

Inventory turnover ratio

It calculates the amount of inventory required in order to assist a given degree of sales.

Working capital turnover ratio

It calculates how well a business can generate sales from its working capital.

Accounts payable turnover ratio

It calculates how quickly a business pays its suppliers.

2.3. Leverage ratios

This set of ratios determines the amount of debts a company owes and how well it can pay it back. The following are the ratios that fall under leverage ratios:

Fixed charge coverage

It determines how well a business can pay for its fixed costs.

Debt to equity ratio

It determines how much the management is funding operations with debt, instead of equity.

Debt service coverage ratio

It determines how well a business can pay back its debts. 

2.4. Profitability ratios

This set of ratios determines how well a business can generate profit. The following are the ratios that fall under profitability ratios:

Contribution margin ratio

It determines the amount of profit earned after variable costs are subtracted from sales.

Breakeven point

It showcases at what sales level a business breaks even. 

Gross profit ratio

It determines the revue after subtracting the cost of goods sold, as a part of sales.

Financial state and net analysis are important as they allow you to stay up-to-date with the economic situation of your company. If you need business valuation services New Jersey, then contact us at ThomasRoss Financial Group.

Increasing business valuation is the primary objective of any organisation.

Raising the value of a business is every entrepreneur’s main goal. You may want to head into the direction of growth with your company or devise an exit strategy, whatever the scenario may be, in order to fulfill you next business step, it’s important to have a high business value. And we help you with just that! 

At ThomasRoss Financial Group, we offer incredible business valuation services New Jersey. Our business and financial analysts use their skills and a number of other effective methods that allow them to come up with the value of your business with utmost ease. 

What is Business Valuation? 

Business valuation is a process that requires a set of methods to determine the financial worth of a business. This procedure is used by economic market associates to estimate the price of a company, which could either be for the selling or buying of that said company. Along with this, financial and business analysts use this process to help business owners resolve legal disputes, such as divorce litigation, restructuring and insolvency, estate contest, and shareholders deadlock. This is also used for issues related to estates and gift taxations, determining a company’s selling price in regards to its assets, establishing the worth between business partners, and many other legal procedures. 

The interesting thing about business valuation is that the value of a company can differ depending on several different factors. If your business is stable and growing at a steady pace, you’d get a different value than if your company is going into liquidation. The current value of a business can fluctuate due to many reasons. Hence, it’s important that business owners get the value of their companies estimated after every six months to ensure that they’re aware of their business’s current value at all times. 

Why Do Small Businesses Need Business Valuation? 

As established above, business valuation is a necessary procedure that all business owners must indulge in. However, it’s even more important for small companies and businesses. Here’s why:

1. It helps with the management of a business

In order to make effective and precise decisions, you need to understand the inner-workings of your company thoroughly. And the only way you can achieve a state of total understanding of your company’s performance is by business valuation. If you choose to not evaluate the value of your business, then you’d be like a blind person driving a car, who is unaware of where s/he is going and always at a constant risk of crashing. 

Managing a business is difficult and requires plenty of strategies, but how would you devise a plan without the knowledge of how your business is performing? If you don’t have a solid plan in place, then your company would struggle to grow and achieve the success you desire. 

1. It helps you set your goals

Without goals, no one can really achieve anything. Hence, this goes without saying and if you want to attain success, you need to complete certain milestones. However, you wouldn’t be able to figure out which millstones you need to accomplish if you don’t set specific goals for your company. And the only way you can do that is by understanding the current worth of your business. 

When you know how your company is doing economically and financially,  it makes the task of determining the next step for the growth of your business very easy. 

1. It helps you track the effectiveness of your strategies

In order to run a successful business, devising plans and schemes aren’t enough. You also need to ensure that your strategies are making a positive difference, producing profitableresults, and helping your business generate great revenue. 

Business valuation enables you to track whether your strategies and plans are affecting your business in any way or not. With the help of your business’s current market value, you’ll be able to figure out if your schemes are good enough, or need further work in order to enable your business to achieve the success it deserves. 

1. It allows you to get more funding

Every business, at a certain point, needs some sort of financial support and backup. You may seek financial aid from banks or investors, however, it’s essential that you provide the current value of your company to both the banks as well as the investors.

This is required for security and assurance purposes. Banks and investors need proof that when it’s time for you to return the loan, you’ll be able to do so without any difficulties. 

When you get your business valued, it essentially means that you gain full control of your business. Business valuation is a tough process and should be performed by professionals only. At ThomasRoss Financial Group, we ensure that your business’s current economic value is evaluated as accurately as possible. Contact us to know more about our services. 

Difference between Audits, Reviews, and Compilations

Owning a successful business is no child’s play. It takes a lot of effort and hard work. Hence, once you’ve established your company, you need to make sure that when you apply for a loan for the expansion of your business, your bank has enough evidence of your success so that they can finalize your loan without any hesitation. 

So, what is this evidence that your bank would require to determine if you qualify for the loan? Financial statements. 

In case you’re looking for stockholders, private investors, and creditors to invest in your company, then they too would require a record of your business’s financial position to assert whether your company is worth their investment or not. 

You can prepare your financial statements by yourself. However, hiring professionals might be a better option since they’re trained and can issue financial statements that accurately represent the economic position of your business with ease. 

At ThomasRoss Financial Group, we offer sublime accounting services New Jersey. Our accountants  are highly-qualified and have years of experience under their belts, which ensure that all the records they draft are error-free and a true representation of your business’s financial status.

There are three different types and levels of financial statements:

1. Audit

2. Review

3. Compilation

Depending on the type of financial statement drafted, the level of assurance may vary. 

1. Audit

Audit offers the most accurate representation of your business’s financial position. An auditor performs an analytical review and subjective testing to issue an audit. They can also verify a specific piece of information if they determine that it needs investigation. 

The process of drafting an audit requires interaction with third parties, evaluation of internal records, and examination of specifically chosen transactions. On the basis of the research performed, an auditor issues a report that mentions whether the financial statements are error-free and properly recorded or not. 

Here, we have jotted down some of the features offered through an audit: 

• It provides the highest level of assurance for stakeholders, investing companies, suppliers, employees, pressure groups, and customers.
• It enables easy, accurate, and on-time payment for goods and services tax, corporate tax, and other taxes.
• It follows the bank agreements. 

It enables the selling and buying of businesses with ease. 

Every public company needs to have an annual audit. However, we recommend that non-public establishments, such as non-profit organizations and other entities that receive finances from the government should also get an annual audit. 

2. Review

This financial statement is not as thorough as an audit but is more extensive than a compilation. A review is a record of the methodical processes used for the financial statements of a company. It also contains information about the queries made for your business’s management team. Further operations may be executed if the financial statements or information related to it seem questionable or inaccurate. 

A review doesn’t need procedures such as extensive studies, evaluation of your business’s internal controls, physical examination of your business’s possessions or confirmation of statistics with third parties. Instead, a review draft provides a limited assurance as it doesn’t contain the report of any material modifications for the financial statements in accordance with the Generally Accepted Accounting Principles. A reviewed financial statement should definitely contain all the important disclosures and footnotes. 

A business may ask for a review report of your business’s financial statements because it offers a neutral surface on which you can provide the data acquired by a CPA (Certified Public Accountant), without paying the hefty price of an audit report. This is advantageous for your business as well as the company interested in your business. 

3. Compilation

A compilation report offers the lowest level of assurance. This procedure is simple in the sense that it only includes the compilation of the financial statements of a business. The information provided in this report is purely the representation of the management of a company, which doesn’t offer any opinion or assurance for the statements. No investigation of the management or methodical procedures is required to issue a compilation. Rather, only the knowledge of accounting principles and basic perception of your company are utilized to draft this report. 

In addition to this, many times, banks need compilations in order to verify the status of your business’s financial position for loan approvals. 

All three financial statements have various purposes and different things to offer. Certain situations require specific types of financial reports. Hence, it’s important that you understand the differences between these statements in order to be able to choose the one that fits your circumstance the most, since all of these financial statements have unique weaknesses and strengths. 

If you need any further assistance or have a requirement for professional accountants, then please get in touch with us at ThomasRoss Financial Group. 

Business startup new jersey

The thought of being your own boss is always thrilling, isn’t it? However, in order to start a successful business, it’s important that you follow a good plan. We, at ThomasRoss Financial Group, offer our clients highly-skilled and experienced business analysts who create schemes that ensure the success of your startup. Our business startup services New Jersey allow individuals to fulfill their dreams of owning a company that thrives on the corporate world in little to no time.

New Jersey is a great place to start a new business, as recent statistics show that it’s the 3rd highest rated city for startup growth in the USA.

In this blog, we’ve broken down all the steps you need to follow in order to successfully start a business in New Jersey.

Step 1 — Decide on a Business Idea

This goes without saying, but you can’t start a business without an idea. This is your chance to be creative. However, coming up with a unique idea in a world where it seems like everything has already been invented, can be pretty hard. Hence, in order to stand out in the market, it’s essential that you work on your business idea extremely well.

Step 2 — Choose a Name for Your Business

This is another step that’s incredibly important and isn’t something that you should take lightly.

Your business name will have a huge role to play in attracting your clients. Decide on a name that works with the sort of business you plan to start.

In order to ensure that your business stands out among your competitors, you should choose a name that:

. Showcases the main aspect of your company

. Is easy to say

. Has a nice ring to it

. Is accessible for “.com” domain

Step 3 — Plan Your Business Module

Planning for a new business is incredibly important. Before you go ahead and invest your hard-earned money, make sure that you critically analyze your idea. It’s often seen that when individuals try to examine their business concept, they fail to observe it from a client’s point of view. This is why you need professionals like us to help you out.

Here are the following things that you need to plan before you enter the business world:

Product Development

I) Determine the main aspect of your business.

II) Plan what services you’d provide to your clients.

Advertising and Sales

I) Figure out the demographics of your potential clients.

II) Decide on ways you want to advertise your startup.

Staff and Employment

Determine the number and type of staff and employees you need to hire for your business.

Financial Strategies

I) Plan a budget for your startup.

II) Decide on a number you’re willing to invest.

III) Determine the salaries you’d pay your employees.

At ThomasRoss, we provide all our clients with excellent business startup services New Jersey. Our business and financial analysts guide you in every step of the way, ensuring that you have a solid plan before you begin venturing the business world.

Step 4 — Register Your Business

There are two benefits of registering your company as a Corporation or an LLC:

• Your business will have enhanced credibility, which means people will find it assuring to work with you.
• In case your business is sued, then you’ll be protected from personal liability.

For startups, registering as an LLC is an excellent move as they’re extremely easy to set up and administer. In addition to this, you’d be required to pay fewer taxes in comparison to other business entities.

You can successfully register your business as LLC in New Jersey for about $125.

Registering your business is important, otherwise, you’d be held accountable for the liabilities and debts for your business. Along with this, those who don’t register their businesses, may need to apply for a Trade Name, also called “DBA”.

Step 5 — File for Tax Registration

Almost every business requires an EIN (Employer Identification Number). It’s also known as the Tax ID Number. In order to recognize a business for federal tax filings, an EIN is needed. You can’t open business accounts or employ staff without an EIN.

There are some additional taxes that you need to register for when you’re starting a business in New Jersey:

• New Jersey Sales Tax

If you’re selling a physical product (pillows, toys, soaps, etc), then it’s essential that you register your business for sales tax in New Jersey.

• Employee Withholding Tax and Unemployment Tax

If you choose to employ a staff for your business, then on behalf of your staff, you need to register for Employee Withholding Tax and Unemployment Tax.

Step 6 — Open Business Accounts

For personal assets protection, opting for specific business credit and bank account is extremely important.

Your personal assets, such as your home, car and other valuables would be at risk, in case you have just one account for your business as well as personal use. If in future, your business faces a lawsuit, there could be a potential danger where you could lose your assets if you choose to not open a separate account for your business.

By following the tips below, you can ensure the protection of your business and personal assets:

• Open a business bank account

This will segregate your business’s assets from your personal assets, in turn, preventing your risk of losing your personal assets. In addition to this, opening a business account also makes tax filing and accounting easier.

• Get a business credit card

This will help you segregate your business and personal expenses. Along with this, getting a credit card for your business will also build your company’s credit history, which, in turn, can be used to raise capital on a later stage.

Setting up a startup in New Jersey isn’t a complicated procedure at the least. However, one must be extremely meticulous and calculative while planning the module for one’s business. If you need qualified experts who can help you plan for your startup, then feel free to reach out to us at ThomasRoss Financial Group.