Independent Business Review (IBR) enables a lender or shareholder to assess a company’s current condition when early warning signs of distress emerge — such as breaches of payment obligations, financial or operational covenants, a sharp increase in debt, declining revenues, deterioration in profitability, or other indicators of weakening financial and operational performance.

Unlike traditional Due Diligence, which focuses on verifying the accuracy of financial and tax reporting and the legal standing of a company as of a specific date, an IBR addresses the broader question of the company’s overall business health, its development prospects, and the available restructuring options aimed at preserving and further developing the business.

Given that each case of corporate distress is driven by unique factors — ranging from external market conditions to intentional or unintentional actions (or inaction) by management — every IBR engagement is inherently tailored and highly individualized.

The primary focus of an IBR typically includes:

• the quality of cash flow and liquidity forecasts;

• the quality of working capital management and key counterparties;

• assessment of the company’s ability to service its obligations;

• identification of hidden business and counterparty risks, including signs of improper business practices;

• evaluation of available restructuring scenarios;

• assessment of operational optimization potential;

• independent review of the business plan / development strategy and preparation of a comprehensive risk map.

A timely IBR therefore enables a company to navigate periods of turbulence more effectively by identifying weaknesses early and outlining the financial and operational restructuring measures required to stabilize and preserve the business.