McLenan Corporate
Financial Health Checklist for Your Business
This checklist should be used as a framework to guide a thorough assessment of a company’s financial health. Regular use of this checklist can help detect early signs of financial distress and facilitate timely interventions to steer the business back to financial stability.
Financial Health Checklist for Businesses
1. Cash Flow Management
- Cash Reserves: Does the company maintain adequate cash reserves for operational stability?
- Cash Flow Projections: Are cash flow projections up-to-date and accurate?
- Payment Timelines: How quickly are receivables being collected? Are there any increasing delays?
2. Debt Management
- Debt Ratios: What are the current debt-to-equity and debt-to-asset ratios?
- Loan Repayments: Is the business meeting its loan repayment schedules without strain?
- Credit Lines: Are credit lines maxed out, and what is the utilisation rate?
3. Revenue and Sales
- Revenue Trends: Analyse trends in revenue over the past 12-24 months.
- Customer Dependency: Is revenue heavily reliant on a small number of customers?
- New Business: What is the rate of acquiring new business or clients?
4. Expense Control
- Fixed vs. Variable Costs: Review the balance of fixed versus variable costs.
- Cost Reduction: Identify areas where costs have been reduced, and assess the impact.
- Unnecessary Expenditures: Are there expenses that can be eliminated without impacting business operations?
5. Profitability Analysis
- Profit Margins: Review gross and net profit margins.
- Break-even Analysis: Determine the current break-even point and compare it with past periods.
- Profit Trends: Assess whether profits are growing, stagnating, or declining.
6. Asset Management
- Asset Condition: Are physical assets in good condition or do they require replacement?
- Inventory Levels: Assess inventory turnover rates and whether inventory levels are appropriate.
- Utilisation of Assets: Are assets being fully utilised to generate revenue?
7. Tax Compliance
- Tax Filings: Are all tax filings up to date?
- Tax Liabilities: Are there outstanding tax liabilities or potential disputes?
- Tax Planning: Is there an effective tax planning strategy in place?
8. Compliance and Legal
- Regulatory Compliance: Is the business compliant with all industry regulations?
- Legal Issues: Are there any ongoing legal disputes or potential legal threats?
- Contractual Obligations: Review the status and implications of major contracts.
9. Strategic Positioning
- Market Position: Understand the company’s position within the industry.
- Competitive Advantage: Identify the business’s unique selling propositions and competitive advantages.
- SWOT Analysis: Conduct a SWOT analysis to identify strengths, weaknesses, opportunities, and threats.
10. Management and Operations
- Leadership: Assess the effectiveness of the management team.
- Employee Performance: Evaluate staff productivity and morale.
- Operational Efficiencies: Identify areas in operations that require improvement.
Contact us today for immediate advice
Email
info@mclenancorporate.com
Address
1 Union Street
Saltcoats KA21 5LL
McLenan Corporate is a trading name of McLenan Corporate Solutions Limited, 1 Union Street Saltcoats KA21 5LL. Company Number SC651445.
Margo McLenan is licensed to act as Insolvency Practitioner in the UK by the Insolvency Practitioner Association.
Insolvency Practitioners are bound by the Code of Ethics when carrying out all professional work relating to an insolvency appointment.