Financial Distress Risk Calculator
A Working Paper for Accountants
This form is designed to contribute to an accountant's year end tax preparation working papers.
It asks a series of questions that together, provide the accountant with a financial distress risk indicator, and aims to help the accountant provide contextualised support to their client's, who may not be communicating the issues of the business.
The form takes approximately 5 minutes if the person completing has the financial and ATO portal information in front of them.
After completing the form, it will send an email of the completed document to the person nominated, so that it can be used within the year end tax preparation working papers for the business.
What's my Financial Distress Risk profile mean?
Based on the information you provided, there have not been any risk financial distress indicators identified in the business.
Our recommendation:
If precursor issues are not actively managed, they can escalate quickly. We recommend completing this form quarterly to ensure distress risks are actively managed.
Based on the information provided the level of risk is low to medium. While you may have some financial stressors in your business, these indicators have not yet escalated to a significant degree.
Our recommendation:
If precursor issues are not actively managed, they can escalate quickly. We recommend completing this form monthly until the risk indicators have been managed out of the business.
Please feel free to contact us for an obligation free chat if you wish to discuss the outcome of this report.
Based on the information provided ther level of risk is medium. This means that, based on the information provided, there are some distress precursors that exist in the business. If not managed, these indicators could escalate into significant financial distress.
Our recommendation:
If precursor issues are not actively managed, they can escalate quickly.
At a minimum, we recommend undertaking a director risk review, to:
- Review ATO lodgements are kept up to date.
- Review Director's Penalty Notice exposure.
- Review corporate structure to ensure personal assets are protected.
- Watch insolvent trading exposure.
Please feel free to contact us for an obligation free chat if you wish to discuss the outcome of this report.
Based on the information provided the level of risk is medium to high.
This means that, based on the information provided, there are a number of distress precursors that exist in the business. Now is a critical time for active management of the distress, before it escalates.
Our recommendation:
At this level of risk, it means that precursor issues have a high chance of escalating further.
At a minimum, we recommend undertaking a director risk review, to:
- Review ATO lodgements are kept up to date.
- Review Director's Penalty Notice exposure.
- Review corporate structure to ensure personal assets are protected.
- Watch insolvent trading exposure.
We strongly recommend contacting us for an obligation free chat to discuss the outcome of this report.
Based on the information provided the level of risk is high. This means that, based on the information provided, there are a number of distress indicators that exist in the business, and these have escalated to the point where the business is considered to be in significant financial distress.
Our recommendation:
We strongly and urgently recommend contacting us for an obligation free chat to discuss the outcome of this report.
