This area covers an evaluation of the company’s financing needs, plans and alternatives and its flexibility to accomplish its financing program under stress without impairing creditworthiness.

The specific issues include :

• Flexibility of planned financial needs : capital spending, dividend levels, acquisitions.
• Ability to raise additional financing under duress.
• Back-up and standby lines of credit : periods and covenants of underwriting facilities and committed lines, bank relationships generally.
• Ability to attract capital : shareholder make-up, access to equity markets.
• Capital commitments.
• Margin of safety in present and planned gearing/leverage levels.
• Asset make-up : nature of assets and potential for reductions or disposals under stress, scalable units.
• Off-balance sheet assets and liabilities : goodwill or other intangibles written off, undervalued assets, pension under funding.