Securing liquidity in the corona crisis

If customers have to close or suppliers are unable to maintain their production, things can become very difficult very quickly. Those who watch the development of their business partners alertly can, however, react quickly and avoid the worst.

For nine months the corona crisis has really been putting liquidity and risk management at companies to the test. It is clearer than ever before how much the success of your own company is linked to the success of your business partners and how unstable even long-standing business partnerships can suddenly become: when customers, suppliers and service providers experience difficulties this has a direct impact on your own liquidity situation. Forward-looking working capital management is therefore absolutely essential.

But what possibilities are there to predict the development of business partners? And how can uncertain factors be taken into account in the prognosis?

Company evaluation through financial statement analysis

The so-called debt service capability of a company provides information as to whether it is in a position to meet its credit or payment liabilities on time from its cash flow. A proven and established method for evaluating the debt service capability of business partners is balance sheet analysis. On the basis of the published annual reports, statements can be derived about, for example, the liquidity, profitability and capital structure of the company being investigated.

With FINOYO, such balance sheet analyses can be performed quickly and simply. The necessary financial reports can easily be imported and automatically aggregated into meaningful ratings, which can form the basis for further decisions.

Even more meaningful with external data

If balance sheet data can be enriched with external information, it becomes a lot more valuable. The data from information agencies and other service providers offers additional details and places the evaluation of business partners on an even broader and more substantial information basis. With intelligent tools the information can be obtained and processed automatically, and converges into an aggregated risk report for the company being evaluated.

Liquidity simulation takes into account the current economic situation

In addition to the analysis and evaluation of balance sheets, FINOYO enables the compilation of target figures and a liquidity simulation. Companies therefore have the possibility to simulate the effect of, for example, lockdowns on the liquidity and the balance sheet rating and to extrapolate the previous year's balance sheet or current inter-yearly financial reports. The tool thus provides a preview of the future development of business partners and allows companies to react in time to the threat of payment defaults or supply bottlenecks.

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