It’s more than “Are we making money?” – You can be profitable all the way into bankruptcy!
Balance Sheet Management is just as Important.
It’s more than “Are we making money?” – You can be profitable all the way into bankruptcy! Balance Sheet Management is just as Important. Contingency Planning and Risk Management are more important than ever
Covenants are Negotiable! Don’t agree to something that is inappropriate or you can’t meet. Monitor Your Compliance
Working Capital Current Ratio Debt Service Coverage Debt to Equity or Local Ownership % ◦ Periods of high commodity prices can raise havoc with this ratio.
Not meeting the loan covenants is grounds for calling the loan…you don’t want that in your financial statement notes!!
Expanding beyond the “traditional” commodities can be good business but brings some new business risks. Boards need to understand these risks and develop policies. The sales/collection process is completely different for some commodities. All it takes is one weak link in the chain!