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Share Price falls focus attention on need for all businesses to keep a tight rein on finances

Peter Sargent

Corporate Finance

| January 24th 2008

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Share Price falls focus attention on need for all businesses to keep a tight rein on finances

Inevitably, analysts’ views on the severity of the situation vary. Recent reports show heavy losses in Asia and intensifying fears over the state of the US economy, triggered by a wave of selling amid talk of market meltdown. European markets recently reported their biggest one day losses since the September 11th attacks in the US. There have been some rises since, but market volatility continues. Peter Sargent, partner at the Halifax office of the leading independent, business rescue, recovery, and restructuring specialist Begbies Traynor, said: “Big falls in share prices may suggest companies are in trouble, but when the falls are across all markets this is, of course, more a reflection of market confidence generally - not necessarily indicative of any underlying problem in an individual business. “The real warning signs to watch out for in companies, whether they are large or small, are cash flow problems. These tend to be exacerbated in tough markets and depleted order books, which are also likely to suffer. Companies need to run lean and tight. The current economic climate will not forgive those who take their eye off the financial ball, extend credit unnecessarily, fail to remove slack, in assets or people, or bury their head in the sand hoping things will get better. The best rule of thumb for any organisation that thinks it is getting into difficulty, is to call in expert help sooner rather than later. This rule applies even more when the economic storm clouds are gathering. ”Begbies Traynor is part of the Begbies Traynor Group plc which is an AIM listed specialist professional services organisation, providing independent professional advice and solutions to businesses, financial institutions, the accountancy and other professions and individuals in areas of finance, recovery, investigation and risk management, specialist financial advice and commercial finance.

Peter Sargent

About the author

Peter Sargent


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Peter is authorised to act as an insolvency practitioner by the Department of Trade & Industry. He is a member of the Insolvency Practitioners Association and a Fellow of R3 (The Association of Business Recovery Professionals). Peter is a council member of R3 and is chairman of the regional activities committee, previously being the Yorkshire regional chairman. Peter began his career in insolvency 1980 at Revell Ward in Huddersfield where he became a partner in 1988. In April 1995 he established Sargent & Company, which merged with Begbies Traynor in November 2005.

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Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ACCA (the Association of Chartered Certified Accountants) ICAS | The Institute of Chartered Accountants of Scotland