1 in 4 firms has cash-flow problems

16th December 2008, Comments 1 comment

"This is alarming as these companies could easily fail if the economic situation were to worsen.”

According to the annual Top 30,000 of Belgian companies published by the business weekly ‘Trends’, a quarter of the nation’s firms could face acute financial problems as a result of the current economic crisis.

This year special attention has been given to how companies are coping with the crisis.

Not so long ago, everything in the economic garden was rosy.

However, the economic situation has deteriorated greatly during 2008 as the crisis in the banking and financial services industry started to spread to the rest of economy.

Although most companies say that they have enough financial reserves, 23.5% admit to having liquidity problems.

The Trends Top 30,000’s Tony Conjaerts told journalists, "If we look at liquidity, one in four companies are experiencing difficulties."

"This is alarming as these companies could easily fail if the economic situation were to worsen.”

30% more companies than last year say they are experiencing problems with late payment of bills.

This creates cash-flow problems and means that the companies affected in turn delay payment of bills to their creditors.

Furthermore, the crisis has also served to dent consumer confidence and cut demand.

A fall in demand means that manufacturers are being forced to cut production which has a knock-on-effect for the labour market.

36% of companies have invested less this year than they did in 2007 and expect that this will also be the case next year.

22% of companies say that they expect to cut staff next year.


1 Comment To This Article

  • Nick Williams posted:

    on 10th March 2009, 23:18:15 - Reply

    I stumbled upon this guide by Hitachi Capital Invoice Factoring, which has 7 really useful tips to beating the credit crunch and ensuring a contant cash flow.


    Some are more obvious than others, but definately worth a look. Hope you find it interesting.