These types of routine exams are on a rotation, typically every six months or annually for certain debtors. We prepare a report for the lender that summarizes the findings and the collateral available as determined through our testing. Procedures typically include:

• Analyzing accounts receivable trends and assessing reasonableness of values based on knowledge of the industry and the debtor’s market
• Reviewing the accuracy and integrity of inventory reports through cost testing
• Determining ineligible receivables and inventory based on the loan parameters
• Vouching shipments to bills of lading or other third-party source documents in order to verify the existence of receivables
• Counting inventory for a selected sample size in order to verify the existence of inventory