The Brief

• Instructed by a Major ABL
• To provide an appraisal of the inventory to support a revolving loan.
• To support a financing facility to provide on-going working capital

Logistics

• A group of companies specialising in lead and copper-based metals that undertakes reprocessing of scrap material into building products and specialist manufactured goods located in UK, Ireland and Netherlands
• Standard cost is frequently adopted for inventory of a commodity nature, so it is important to understand how this varies against current actual cost.
• The valuation is underpinned by commodity prices of the relevant metals, requiring analysis to identify the elemental composition as well as anticipated sales value and forecast demand.

Resolution

• Report recommendations included discussion on the optimum method to measure the valuation against commodity prices on an on-going basis.