26 October 2008

Warning Signs

Business failure are often preceded by a number of symptoms or warning signs. If identified early enough, business failure can possibly be stopped and turned around back into sustainable growth.

Businesses suffering from liquidity problems usually have excessive loan repayments, accumulated inventory (low inventory turnover), declining sales orders and declining cash inflows.

Below are some causes affecting the performance of businesses:

Macro issues - economy, industry and legal issues

Micro issues - management, policies and accounting practices

Important measures can be taken to attempt to turn the business around, such as reduced investment in inventories, greater control of overhead costs, a more rigorous receivables collection policy, and increased long term and short term borrowings within the business's capacity to service.

Important initiatives to help Turn Your Business Around:

1- Cash Flow projections
2- Receivables management
3- Inventory management
4- Good relations with stakeholders

Our Vantage Performance team is looking forward to interacting with you again.


Pedro Bueno

Vantage Performance Team
Turnaround Management Specialists

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