Accelerated exit readiness for automotive supplier

Accelerated exit readiness for automotive supplier

Stout provided exit readiness support to a national automotive parts supplier (the “Company”) with $50 million in revenue. In prior months, the Company failed to complete a quality-of-earnings (QofE) process in conjunction with a capital markets’ raise with a private equity (PE) buyer. Accordingly, the PE buyer was unable to obtain required investment committee approval for the transaction.

The Finance Integration team was brought in to swiftly create and recast U.S. GAAP financials on a monthly and annual basis to support a successful QofE process. The Company consists of three independently operated business units spanned across multiple states. Each business unit utilized disparate financial reporting systems and lacked sufficient finance and accounting process hygiene. The business units maintained lean accounting finance functions and had never produced monthly U.S. GAAP compliant financial statements.

The work performed included:

  • Reviewing the Company trial balances (TBs) and creating financial statement line item (FSLI) mapping
  • Reconciling TBs to entity general ledger systems
  • Reconciling significant accounts to underlying subledger data as applicable
  • Identifying significant estimates and critical accounting policies for material topics
  • Proposing adjusting entries to conform balance sheets and income statements to U.S. GAAP
  • Revising financial statements based on aforementioned items

Stout’s Finance Integration team was able to produce the following deliverables for each of the three business units within four weeks:

  • U.S. GAAP compliant balance sheet – Recasted monthly and annual statements
  • U.S. GAAP compliant income statement – Recasted monthly and annual statements

In addition to the immediate execution, Stout’s team provided the following for the Company to continue producing U.S. GAAP compliant financial statements:

  • A financial reporting model
  • Templates for adjustments and recommended policies
  • A view on finance process and opportunities for remediation