Solvency test checklist for directors

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.