Horizon Advisors Company Checkup
How are you doing?
Look for early warning signs to evaluate and predict the future health of your business.
Answer 20 simple questions to receive an indication if there is trouble
on the horizon for your company.
Step 1: Review your company’s most recent financial statement to answer first seven questions.
A simple yes or now no answer will shed tremendous light on possible problems.
1. Has your company had a material sales forecast shortfall against budget for three or more months?
2. Have selling, general and administrative (operating) expenses increased
as a percent of revenue or grown faster than revenue?
3. Have gross margin percentages declined for three consecutive months?
4. Have net profits been below budget for three consecutive months?
5. Have receivables over 60 days increased over the past three months?
6. Have payables over 90 days increased over the past three months?
7. Was the operations inventory shrinkage over the past year greater than the prior year?
Step 2: Call your company’s top management together to discuss what actions
can be taken to address any of the first seven questions that had a “yes” answer.
Step 3: You are then ready to focus on the following 13 questions.
Again, top management of your company is the best source.
A simple yes or no answer to each question is all that is needed.
8. Are phone calls and meetings requested by your banker, becoming more frequent?
9. Is the company writing checks to vendors and
then holding the checks for future mailing?
(held checks)
10. Has there been an increase turnover in top or middle management?
11. Are suppliers calling more frequently, or demanding payment or tightening terms?
12. Have any large customers been lost lately?
13. Are the gross sales margins of the new customers lower than the margin received from customers you have lost?
14. Has there been an increase in workers compensation claims?
15. Has there been an increase in absenteeism?
16. Has the company seen an increase in product quality complaint?
17. Has top management (both the CEO and CFO) failed to visit all key locations at least once in the last year?
18. Is the company’s sales forecast based on growth rates that are greater than the industry is expected to grow?
19. Has the company’s actual cash flow been less than projections for three consecutive months?
20. Are the company’s sales concentrated with customers who are experiencing financial or operational problems?
You are now ready to add up the number of “yes” answers.
If you have less than eight “Yes” answers in total—Congratulations!
Your company is probably in reasonably good health.
If you have eight or more “Yes” answers—your company may be on its way to declining economic health and we recommend that you delve deeper to find the root causes.
If you answered “Yes” to more than fifteen questions—your company needs
immediate outside assistance to bring it back on course.
Click here to arrange a confidential preliminary consultation
with one of the principals from Horizon Advisors.Horizon Advisors
10 South Riverside Plaza Suite 1800
Chicago, IL 60606
(312) 474-6176
(312) 474-6099 Fax
consultants@horizonadvisors.com