This programme can run as an online or classroom training

(Available also for Customised Training by Duration, Venue & Fee)

Course Contents

DAY ONE

Introduction - Why Companies Fail

• Business failures

• Macroeconomic instability

• Political instability

• Declining industry

• Financial stress

• Management failure.

Causes of Corporate Failure

• Weak Financial Structure

              - high gearing

              - poor liquidity

              - high operating costs/low marging

              - cash consumer - poor cash flow

• Overtrading

              - emphasis on growth and not profit

• Poor Leadership and Management

• Poor Information Management System

• Acquisition/Diversification

• Too big a project.

DAY TWO

   Problem Loans - When and Where to Look

• Branch Information

• Personal Information

• Financial Information

• Management Information

• External Information

Branch Information

• Excesses

• Increasing hard core in outstandings

• Returned cheques

• Overdue items

• Reduced turnover on account

• Withdrawals in large amounts.

Security

• Value of security going down

• kite-flying

• poor reporting on secured assets

• many requests for bank information

DAY THREE

Personal Bank Information

• Elusive head or manager

• Request to release security

• Request to release personal guarantees

Customer Personal Customer Information

• Request for increased in facility

• Supplier payment pressure

• Old stock

• Poor staff morale

• Changes in key staff/management

Financial Information

• Sudden losses

• Substantial decrease in net worth

• Substantial decrease in liquidity

• Deteriorating ratios

• Late submission of financials

• Auditors qualified opinions

• Change of auditors

• Change in valuation of assets

• Window dressing

• Drop in trade creditors

• Sale and lease-back of assets.

DAY FOUR

Management Information

• Current performance information not available

• Current performance information cannot be prepared

• Inflated management ideas about current profitability

• Underestimated management ideas about current liability

• Sensitivity analysis poorly or not done

• Targets consistently not met

• Poor or no costing system.

External Infomation

• Troubled industry or sector

• Unfavourable market information

• Increased borrowing from other banks

• Security given to other banks/creditors

• Suspicion on information from other banks

• Ratings downgraded.