Balance Sheet Re-Organisation

This is an exercise where the business activities, historical and forecast financials and business plan of a corporation are examined.Against such examination and depending on the forecast financial needs of the corporation, a scheme can be devised such that the debt and equity component of the corporation can be adjusted to render the overall cost of capital more efficient.

For instance, corporations which have a large component of short term debt that does not match medium term cash inflow may to restructure such debt through issuance of long dated quasi-debt instrument.

In addition, assets which yield low return on assets may be disposed off to reduce the gearing position of the corporation under consideration.

Overall, balance sheet re-organisation seeks to transform the balance sheet of a corporation to such position that better reflects the cash inflow and outflow nature and trend of the business.