Restructures and Turnarounds
Restructures and turnarounds are terms that are often used as synonyms. However, SOS notes some unique differences in these terms. In the professional world, restructuring focuses on the balance sheet, organizational costs, cash flow, and business value for either liquidation, organizational sale, or debt discount. Turnarounds generally are more inclusive and focus on the following elements: cash flow demands; profitability; operational structure and effectiveness of the enterprise's management, systems, procedures, pricing, purchasing, production, and market strategy; contribution to profits by division, facility, or product; underutilized assets; the level of distress, the “window of opportunity” or time remaining before funds are exhausted; pressure, patience, and support among the various stakeholders with an aim to gain common goals; necessary business changes to match industry momentum; leadership and talent to support such change; and moving to restructuring strategies (above) only if and when the company has previously maximized its self-help opportunities.