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Real Estate & Cash Flow

BY&S offers two primary products to support buyers, lenders, and investors in the real estate and cash flow space. We work with each client to determine what their specific requirements are and can tailor each product as needed.

Quality of Earnings/Real Estate Cash Flow Exam

BY&S provides an analysis of the company’s financial statements and cash flow to determine the reasonableness of the reported EBITDAR, typically for the most recent T6M or T12M period. Typical analysis includes the following:

  • Validation of revenues
  • Validation of expenses
  • Summary of non-recurring items
  • Presentation of proforma EBITDAR
  • Review of items that could encumber the asset or cash flow
  • Analysis of historical bad debt
  • Summary of trends and key performance indicators

This analysis is very useful to buyers, real estate lenders, and investors in underwriting potential transactions as it provides meaningful insight into the economic earnings power of the potential target or borrower.

Real Estate Portfolio Review

At the request of a healthcare lender or investor, BY&S will conduct a financial review of a particular borrower’s portfolio. Typical analysis may include the following:

  • Calculation of covenant compliance and comparison to borrower’s calculations
  • Review of financial reporting noting any changes in accounting methodologies
  • Review areas of lender concern. This may include:
    • A/R issues including bad debt
    • Stretched accounts payable
    • Survey issues
    • Unpaid taxes
    • Litigation
    • Excess distributions by borrower
  • If the portfolio review is the first review, BY&S may test the reported EBITDA of the borrower

Portfolio reviews are an excellent tool for lenders to gain additional comfort regarding the financial condition of your borrowers.