Ignorance is not Bliss…
Then there was the one who had been told by the Group Board that if they didn't improve their return on capital, at the time 7.1%, they'd be closed down.
The directors said that they had 17 days outstanding debtors whereas looking at the accounts, the debtors on the accounts when compared with last years' turnover showed 35 days.
The directors explained that they ignored inter-company indebtedness.
On reflection, they decided to ask the associated company to get finance locally, the debtor days did come down to 17 days and they improved the return on capital to 9.6% almost immediately. And saved the company…. And their jobs! What's your debtor days?..........................................
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