Turn Around Services:
There are a number of early warning signs that indicate financial problems within a company. Being aware of these signals can help prevent losses.
In a world of rapidly changing environments, staying focused and understanding your financials is crucial. For many under-performing companies, timely access to qualified management and financial resources can often mean the difference between a successful turnaround and business failure.
The first places to look for trouble signs are the cash flow statements. When cash payments exceed cash income, the company's cash flow is negative. If cash flow stays negative over a sustained period, it's a signal that cash in the bank could be running low, so also keep an eye on changes in the company's cash position on its balance sheet. Remember, even profitable companies can have negative cash flows and find themselves in distress. Long delays between the time when the company spends cash to grow its business and when it collects cash receivables from resulting sales can severely stretch cash flow. Working capital may also decline and become negative, as accounts payable grow at a faster rate than inventory and accounts receivable. In any case, negative operating cash flows, period after period, should be interpreted as a warning that the company could be headed for trouble.
We have expertise in turnarounds, restructuring of business units, and also debt. If you are concerned by your business's performance and you would like a CFO to review your financials and processes, we can give you a diagnosis and solution to your business problems. The following are some signs that your business is running into trouble:
- Increasing Inventory Levels
- Shrinking Gross Margins
- COD Requirements By Vendors
- Strained Vendor Relationships
- Late Payroll Tax Deposits
- Loss of Key Personnel
- Excessive Employee Turnover
- Loss of Key Customers, Suppliers, or Contracts
- Working Capital Deficit
- Loan Covenant Defaults
- Sales Increasing Without Increasing Profits
- Payments To Vendors Beyond Terms
- Interest Expense Increasing Faster Than Sales
- Uninsured or Under-Insured Losses
- Declining Sales - In Total or Per Unit
- Debt to Equity Ration signs.