Solvency test checklist for directors

type
Guide
author
By Institute of Directors
read time
3 min to read
balls balancing on seesaw

The IoD has developed a checklist for directors which sets out considerations in the following areas for assessing solvency:

    • Profit projections
    • Cashflow budgets
    • Ability to realise current assets, particularly inventories and receivables
    • Ability to comply with normal terms of credit
    • Possibility of withdrawal of financial support by major lenders
    • Contingent liabilities.