What you should avoid, prevent and control in troubled times

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In troubled times, it is important that you and your company work proactively instead of reactively, that you have extra control of key figures and dare to take in any risks before they have time to affect your business too much.

We had the opportunity to talk to Jonas Forgsberg, CEO of Svanberg Factoring AB and CFO of Svanberg Invest & Co, about what companies should review and keep extra track of in tougher times.

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Signs of troubled times

Jonas Forsberg has many strings on his bow. In addition to his roles as CEO and CFO, he works actively with corporate governance in 5 subsidiaries, runs development projects and has a background as both CFO and IT consultant.

When interest rates start to rise, energy costs start to increase and exchange rates start to change, you as CEO and management need to react

,” says Jonas.

These things are signs that troubled times may be on the doorstep, and it is important to know how one’s companies will be affected.

But in troubled times, banks’ requirements for loans are also increasing. Banks revalue companies’ overdraft facilities based on current risks and you need to ensure and prove to your bank that you are able to carry your overdraft next year. If you are unable to do so, there is a risk that the bank will withdraw your loan. In other words, it is very important that you and your colleagues keep track of your overdraft facility and what your bank’s requirements are. And remember that these requirements can change quickly!

Questions to ask yourself:

  • What profit level is required for your company’s overdraft?
  • Is that a win rate you achieve?
  • What figures do you need to look at to create the right conditions for your company?

Key figures to keep an extra eye on in troubled times

In troubled times, there are some key figures and areas that you should keep a little extra track of. These include your company’s profit, balance sheet, relationship between customer receivables and supplier costs, and cash flow.

1. Do you make a profit?
If your company makes a profit even in tougher times, you can rest easy, then you don’t have to worry about possible financial problems.

2. Do you have too many costs on your balance sheet?
Make sure you don’t balance too much expense on your balance sheet and don’t put things that you can’t really afford.

3. What is the relationship between customer receivables and supplier costs?
Make sure to have a healthy relationship between your company’s customer receivables and accounts payable.

4. Do you have a good enough cash flow?
Even if your company is doing well, your bank will react if you have too low a cash flow. When this happens, it is common for companies to apply for more loans, but many times it is perhaps actually more shareholders who are needed.

Good things to keep in mind in your CEO report

Troubled times can also affect what you should include in your CEO report and how you should post it. During these periods, it is important to have periodisity, but also to describe any risks in your business. In this way, a discussion is created about how your company can meet them.

Important with competent reporting tools

Access to a good reporting tool becomes extra important in troubled times when you really need to keep a close eye, all the time. A reporting tool that allows you to see your numbers in real time in easy-to-understand dashboards that update automatically without you having to spend any time. If you want to know more about Boardeaser’s solution for this, you are always welcome to contact us for an unconditional conversation.

Want to know more about how to write a good CEO report? In our guide “
Everything you need to know about CEO reporting” you
get information and simple steps on how to create the ultimate CEO report!

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Get the guide: The ultimate guide to CEO reporting! >



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