Going Concern Indicators (Financial)

Question 1

Financial (liability)

Answer 1

Net liability or net current liability position

Question 2

Financial (borrowing)

Answer 2

Fixed-term borrowings approaching maturity without realistic prospects of renewal or repayment

Question 3

Financial (creditors)

Answer 3

Indications of withdrawal of financial support by creditors

Question 4

Financial (operating)

Answer 4

Negative operating cash flows

Question 5

Financial (ratios)

Answer 5

Adverse finance ratios. High gearing, low current ratio, poor profit margins

Question 6

Financial (operating losses)

Answer 6

Substantial operating losses or significant deterioration in value of assets used to generate cash flows

Question 7

Financial (dividends)

Answer 7

Arrears or discontinuance of dividends

Question 8

Financial (due dates)

Answer 8

Inability to pay creditors on due dates

Question 9

Financial (loan agreements)

Answer 9

Inability to comply with the terms of loan agreements

Question 10

Financial (cash-on-delivery)

Answer 10

Change from credit to cash-on-delivery terms with suppliers

Question 11

Financial (obtain financing)

Answer 11

Inability to obtain new financing