The economic news might not be as gloomy as a few months ago, but the UK’s GDP is flatlining and the IMF is predicting we will be one of the worst performers in 2023 among leading economies. Surely this is no time for ambitious expansion or opportunistic acquisitions? Or is it? After the challenges of the pandemic and the impact
The recent news that one of the UK’s best run and most respected businesses predicts that its sales and profits will fall back in 2023 will come as alarming news for even the most optimistic entrepreneur. Next has an abundance of buying power, economies of scale and the resources to invest in AI to improve efficiency – and still it
So far in our series on what a formal insolvency does to a previously solvent balance sheet and how it impacts stakeholder recoveries, we have looked at overall principles, shrinking non-current asset values, diminishing current asset recoveries and ballooning liabilities. Now we turn to the contentious issue of the cost of an insolvency process. Unfortunately, there is little understanding in
When the government launched its business support loan schemes early in the pandemic, there was widespread praise for the initiative. The speed of roll out, simplicity of the application process, initial repayment holiday and low interest rates were just what embattled businesses needed at a time of massive disruption and huge uncertainty. The Bounce Back Loan (BBL) scheme aimed at
Following our first three articles on business devaluation during insolvency, we now turn our attention to the liabilities in the balance sheet. What is often not realised is how a business’s liabilities can grow faster than Jack’s Beanstalk once the business has transitioned from a going concern to a financial downturn ending in insolvency proceedings. This can occur on a
In this third instalment on the devaluation of a business during insolvency, we turn our attention to current assets. These assets can not only shrink alarmingly in value during insolvency proceedings, but can also, in some circumstances, actually turn into net liabilities. How can current assets lose value? Inventories Inventories include a wide range of different items. From raw material
