Turnaround Consulting
It is far from uncommon for companies to experience downturns over the course of their business life cycles. In these difficult situations, we assist managers and other professionals as they develop and implement step-by-step action plans with targeted completion dates. Our plans are designed to improve profitability and cash flow while protecting banking and supply chain relationships.
When profitability is low, income tax liabilities are rarely an issue. Some tax relief may be obtained by carrying back net operating losses (NOL) and deducting them against earlier profitable years to generate a tax refund. Any unused NOL after carryback can be carried forward as deductions against future profitable years.
For credit purposes, businesses wish to appear profitable to banks and suppliers. For income tax reporting, lowering taxable income will reduce income taxes. A CPA can help your business work toward either of these goals by using the correct depreciation methods. Book depreciation uses straight-line depreciation methods and longer asset lives. This results in lower depreciation expenses and higher net income. Accelerated depreciation methods can be used for tax depreciation schedules, resulting in higher tax deductions and lower income taxes.