What insights could be helpfull to segment clients that need attention
There could be a significant impact on the financial statements of businesses. To segment clients and pro-actively follow up clients we offer insight queries based on ratios:
Quick ratio < 1
(# 40__41 + # 50__53 + # 54__58) / (# 42__48 * -1)
#40__41 : Trade debtors and other amount receivable
#53__58: Term deposits/credit institutions and cash in hand
#42__48: Amounts payable within 1 year, trade debts and taxes, social security, other amount payables
Is the company able to meet all current obligations in the short term (without taking stock into account)? A quick ratio above 1 is generally considered safe, this means that it must be possible to fill the short-term with cash. Therefor, call up all files with a quick ratio < 1. It indicates how likely an organization is to run into financial difficulties. The ratio can help estimate the possibility of a company getting difficulties to pay debtors, with additional costs as a result.
Net cash < 0
The net cash indicates whether a company has either a cash surplus or a deficit. The net cash should therefor be a positive value. The net cash is normally expressed as: cash investments plus cash and cash equivalents <1 year minus financial debts : # 50__53 # + # 54__58 - # 43
In this case, we can tweak this formula to a stricter shorter-term net cash formula where only cash is compared to financial debts <1y (incl. Trade debts): # 42__48
#54__58 - #42__48 <= 0
#54__58 : Cash (banks) and cash at hand
#42__48 : Amounts payable within 1 year, trade debts and taxes, social security, other amounts payable
Impact loss of revenue
It is likely that certain companies won’t get any revenue in the coming period. Let us forecast a loss of revenue for 2 months, based upon the value of previous bookyear (at end year).
Given that all are costs of previous bookyear (at end year) stay at the same level, we will like to get an overview of all companies that don’t have enough cash to cover such loss of revenue. Also, if the costs are higher than the forecasted revenue, we should actively look at the cost structure of this company.
We have an insight query which allows you to filter out and follow up clients who’s cash position is not sufficient to cover a period of 2 months revenue loss, where
(#55+#57)+((((period.minus_1y.year_end.accounts.70) (10/12)) -1)-(period.minus_1y.year_end.accounts.6))
When below 0, let’s use the cashflow template to challenge the cost structure of these companies.
Hi Sofie! This is excellent- is it possible for us to update these segments with the UK Silverfin CoA for our UK customers?