Insolvency Indicators
Most business experience one or more of these problems at some point in time - but if your company is experiencing a number of these indicators on a sustained basis, it may be insolvent.
* Suppliers placing the company on COD or demanding payment before resuming supply
* Ongoing unsustainable losses
* Poor cash flow
* Exceeding overdraft limits and unable to obtain further credit
* Stop supply from suppliers
* Creditor demands and threatened legal action
* Creditors unpaid and outside of usual terms
* Increasing debt - (liabilities greater than assets - Liquidity ratio below 1)
* Unrecoverable loans to associated parties
* ATO demands from overdue taxes
* Asset sales to fund trading
* Falling Stock levels
* High staff turnover
* Incomplete Financial Records
* Postponement of essential maintenance
* No access to alternate finance or ability to raise equity
* Issuing Post dated cheques and dishonoured cheques
