Of companies which fall behind with paying their tax, one in seven fails (*)
The company reports overdue debts to the tax authorities at the end of the financial year in its recently filed annual accounts (item 9072). This may indicate serious financial difficulties, especially if the company in question also shows liquidity problems.
Please note that this information is based on recent annual accounts and thus reflects the state of overdue debts as of the closing date of the financial year.
(*) Source: Companyweb: results based on our own study into causes of bankruptcies.
In other words, this company is already missing one full financial year.
Companies in difficulties often hold their annual accounts back because they'd rather not reveal the poor figures.
So watch out carefully and ask the company concerned why.
(*) Half of all companies which go under have still not lodged their annual accounts for the year before even after their latest financial year has ended!
(*) Source: Companyweb: results based on our own study into causes of bankruptcies.
Negative returns for two years is a major heads-up to the Court of Commercial Enquiry at the Court of Commerce.
An established business which loses money year in, year out has no future anyway.
New businesses may often show a negative return (high startup costs, low sales at first, ...) but things should clearly be getting better after two years.
Profitability and liquidity together give a good idea of how a company is faring.
| Liquidity | Profitability |
|---|
| + | - |
| + | Healthy | Chronically sick |
| - | Temporarily sick | Dying |
(**)
(**) Source: Handbook "Financial analysis process" by Hubert Ooghe and Charles Van Wymeersch (Intersentia)
