Duff & Phelps Corporation, an independent financial advisory and investment banking firm, has developed a predictive tool to help companies achieve a clear and quantifiable understanding of their risk of receiving a “going-concern opinion” (GCO).
Reportedly, the tool objectively analyses a defined set of risk factors and provides companies with a risk score. The result is an end-to-end solution that helps companies identify, quantify and assess their risk; develop and execute action plans to address and mitigate the fundamental issues underlying going-concern risks; and advise on communication strategies for investors and stakeholders.
Michael Athanason, managing director and leader of the firm’s Corporate Finance Consulting segment, said: “In today’s economic environment, even previously healthy companies may have going-concern issues. Since going-concern opinions impact the willingness of investors, business partners, creditors and customers to do business with a company, it is crucial that management and the board take a proactive approach to identify and address conditions or events that raise going-concern doubt before it is too late.”
Michael Kelly, a managing director at Duff & Phelps, said: “We identified a need for companies to accurately quantify and characterize their going-concern risk. Our proprietary risk scoring is based on quantitative and statistical analysis of all US public companies with more than $25 million in revenue that have received going-concern opinions in the past five years.”
