How few KEY financial & non-financial indicators of a business play a vital role in decision making process?
In a business environment where lending and borrowing are the norms, a company’s financial indicators play a vital role in the decision-making process for the lenders - such as Gross profit margin, Net profit margin, Free cash flow, leverage ,and gearing ratios, working capital cycle (WCC), debt service coverage ratio (DSCR), EBITDA.
According to Harvard business school online “Financial KPIs are metrics lenders use to track, measure, and analyze the financial health of the company.” These financial KPIs fall under a variety of categories, including profitability, liquidity, solvency, efficiency, and valuation. This indicates the financial health of the company and help lenders and investors to decide.?
Key non- Financial aspects for Middle Eastern companies
Apart from the financial analysis, lenders in the Middle East prefer to do a thorough analysis of the non-financial aspects of the company such as the economic ties with the host country - whether they own any real estate in the form of residential buildings or flats, commercial buildings or office units, factories, warehouses, plots, etc. Lenders also try to understand the background of the promoters or the key people in the business and their success stories. However, these are a few key parameters a lender tries to have in place to make a decision.
?In case a company is going through a challenging phase and the business has low liquidity or working capital then it is a major cause of concern and steps to improve the health of the company must be taken before it is too late. One of the steps could be bridging the gap by availing banking facilities. These steps are also best to be taken before there is any red tape zone in business financial health.
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Corporate debt advisory firms in the UAE
There are many UAE-based corporate debt advisory firms in place run by senior bankers with hands-on experience and understanding of the borrower's and lender's requirements. They understand the dilemma of both parties. They know what lenders in their network are looking for and how a harmonious relationship can be built between a borrower and a lender. Corporate advisory services can help borrowers in structuring a tailor-made facility in line with their business model and also help them avail the same from their local and international lenders pool. They understand what it takes and what are the most beneficial services a company can avail concerning its current financial status and requirement.?
Consulting with experts at amnacapital - One-stop solution for SMEs & Corporates based in the UAE that provides seamless corporate debt advisory services to potential borrowers.
?www.amnacapital.com; [email protected]; +97 152 142 6699