Acute liquidity pressure
In the current economic climate, many businesses face some degree of financial hardship. While certain financial "crunch-points" can be foreseen (eg the maturity of a company's banking facilities), sudden and unexpected events can create serious liquidity problems.
In either case, it is important to take decisive action to preserve and improve liquidity and avoid the potential destruction of stakeholder value that can result from business uncertainty or, at worst, formal insolvency. The earlier that a potential or actual liquidity issue can be identified, the more likely it will be that the company can respond effectively and mitigate potential damage.
Key issues to consider if acute liquidity issues arise may include: