Solvency Opinion

A solvency opinion of capital adequacy is required in a leveraged transaction, most often by the primary lender(s). The opinion values the company as a going concern, on a pro forma basis, immediately after and giving effect to the transaction and the associated indebtedness.

Our service is to estimate the present fair saleable value if the aggregate assets of the company (including goodwill) were sold as an entirety in a reasonable timeframe. For the solvency opinion, we perform three tests, as follows:

Balance Sheet – present fair saleable value of new company exceeds its stated liabilities, new financing, and identified contingent liabilities

Cash Flow – new company can expect to meet its debt obligations as they mature

Reasonable Capital – reasonable capital is available to company to engage in its business, including adequate working capital and capital expenditures.