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Solvency test checklist for directors

type
Guide
author
By Institute of Directors
date
1 Apr 2020
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.

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