Page 9 - FINANCE PART 2 - 8. Businesses In Difficulty

BUSINESSES IN DIFFICULTY

Businesses in difficulty

• For instance, the A-score model contains some

useful indicators of typical problems in companies

that might lead to business failure. Some of the key

characteristics of a firm in financial distress include:

• weak governance structures

• weak accounting structures

• mistakes, including excessive borrowing

• symptoms of problems, including employees having low
morale

• The three biggest mistakes that often contribute to

failure is: overtrading, gearing and taking on big

projects.

9