Problem:
A manufacturer of consumer goods needed to obtain financing to expand their operations. They approached several banks, but were unable to secure financing. The bank told the owners that they lacked sufficient net worth to obtain the level of financing they needed. The bank also objected to the company’s financial statements, which reflected inadequate profitability in recent years.


The SRG Solution
We performed a review of the client’s operations and financial statements, and discovered that the client had been focusing on paying the lowest possible tax as their primary goal. In an effort to reduce tax liability, the client had been understating its revenue and profit. Solomon Ross, Grey and Co. helped them develop a strategy to separate their financial reporting from their tax returns. By utilizing different year ends and different methods of accounting, we helped the client achieve two goals that they thought were incompatible - low taxes and high net income. And of course, all of this was done in compliance with generally accepted accounting principles and IRS regulations.