How do you know if your company is at risk of becoming insolvent, or is already insolvent?
If you are no longer able to pay your debts when they are due, and your liabilities outweigh your assets, your company is likely insolvent. If a company is insolvent, the risks of continuing to trade for the Director(s) are significant, and in order to protect themselves, directors are recommended to take immediate action to work with an ASIC registered insolvency professional.
It can be difficult to know when a company has crossed the line from experiencing a cash-flow issue to becoming insolvent. To enable you to determine your liabilities (how much your company owes) compared to your company’s assets*, below is a simple calculator Insolvency Australia has put together. List all your company assets, cash in bank/on hand, and your liabilities (the amount you owe to debtors) to give you a snapshot of your business’s financial position.
If you believe your business is insolvent or heading that way, it’s important to take action immediately and speak with your accountant or an insolvency specialist to discuss the severity of the problem and to determine the best-outcome solution.
Insolvency Australia enables you to search, compare and connect with Registered Liquidators and Bankruptcy Trustees around Australia – 24/7. The sooner you seek advice, the greater the chance your company’s business surviving.
Please note this calculator is a guide only and should not be relied upon in any insolvency or legal process. The results will also vary based upon the information entered and the accuracy of the data.
- items, cash, property, stock, plant, machinery, vehicles, fixtures, fittings and other items that have a financial value.