Other insolvency indicators to look out for:

Business Liquidation

  • Continuing losses

  • Liquidity ratios below 1

  • Overdue commonwealth and state taxes

  • Poor relationship with Bank, including inability to borrow further funds

  • No access to alternative finance

  • Inability to raise further equity capital

  • Suppliers placing company on COD, or otherwise demanding special payments before resuming supply

  • Creditors paid outside trading terms

  • Issuing post-dated cheques

  • Dishonoured cheques

  • Special arrangements with selected creditors

  • Solicitors letters, summonses, judgements, or warrants issued against the company

  • Payments to creditors of rounded sums which are not reconcilable to specific invoices

  • Inability to produce timely and accurate financial information to display the company’s trading performance and financial position and make reliable forecasts.

  • Non payment of statutory superannuation contributions.

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