Financial position of business

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  • zmt #4414

    I have a number of questions around the financial position of the business and loan purpose:

    1. There were $80000 of legal expenses in 2014, which looks abnormally high. What was this in regard to and are further such expenses expected?
    2. Trade Debtors jumped from $1800 in 2013 to $539000 in 2014. What has led to such an increase and is any rectification expected?
    3. Current Assets are less than Current Liabilities of the business, and there are accumulated losses. Does the business have sufficient positive cash flow on an operating basis to make interest and capital repayments on the loan?
    4. The purpose of the loan is for working capital. How will the additional working capital be utilised? How is this expected to benefit the position of the business?


    Admin Fee User #4419

    1. The legal expenses were high due to a departure of a director. This is not likely to be ongoing.
    2. we will ask the borrower to respond
    3. we are advised that this is the case, they have sufficient cashflow and as we hold the invoices that we
    buy we can withdraw the money from those invoices upon payment
    4. the working capital is to be used to fill work orders by buying more equipment, and putting on more
    staff. We will ask the borrower to add more information


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