To recover lost profits in a court case or legal dispute, it is necessary to show solid proof of the overall lost profits that you are claiming. When financial difficulties arise because of the wrongful actions of someone else, then you might need to prove that financial harm occurred as a result of their actions.
The analysis can quantify the financial damages that you suffered, in order to help you recover the money that was lost.
When Do You Need Lost Profits Analysis?
Often, lost profits analysis goes hand-in-hand with legal disputes or questions about insurance payouts, and our team of Maryland forensic CPA’s can work with your attorney to put together the information that is needed so that you can best present your case.
There are many situations that might involve lost profits, and it is best to consult with a qualified attorney and a CPA for the best outcome in the situation. Here are two examples of lost profits situations:
1) You are an exclusive distributor of a certain product, and you find out that the manufacturer is cutting you out of the deal and selling the product directly to your customer. When this act occurs, regardless of a distributorship agreement, then lost profits need to be considered.
2) You discover that an employee or shareholder has created a competing business. You may be able to prove diminution in business value, unjust enrichment and\or lost profits based on the facts and circumstances of your case.
If you find yourself in a situation where you suspect that your company has lost money due to the wrong-doing of another person or company, then the best thing that you can do is enlist the services of a qualified forensic CPA in order to quantify the lost profits that have occurred in the past and may continue to occur in the future.
Forensic Accountants in Maryland
Calculating Lost Profits
There are several important steps that are required for the analysis of lost profits within a business. Typically, a CPA will start by estimating the lost revenues, and then take a close look at financial accounts and overall monetary trends to identify the changes that occurred. Some of the factors that are considered include: cash flow, sales projections, variable and fixed costs, business value, inventory, and spending.
Working with a forensic accountant can be one of the best ways that you can strengthen the evidence and show the actual profits that were lost. A qualified accountant has the experience to know what to look at, in order to objectively identify the profit losses in question, which could potentially increase the amount of lost profit payouts that you receive.
Do you need help identifying lost profits in your company? Contact Weyrich, Cronin, & Sorra today to learn more about the ways that we can support your business and uncover the information that is needed for your lost profits analysis.