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Debt Management checklist
Debt Assessment
Review current debt obligations and maturity profiles
Analyze debt-to-equity ratio and compare with industry benchmarks
Evaluate interest coverage ratios and debt service coverage ratios
Debt Restructuring
Identify opportunities to refinance high-cost debt
Negotiate with creditors for more favorable terms
Consider debt consolidation to simplify payments and potentially reduce rates
Cash Flow Management
Improve collection processes to reduce accounts receivable days
Optimize inventory levels to free up cash
Extend accounts payable days where possible without incurring penalties
Budgeting and Forecasting
Create a detailed budget that includes debt repayment schedules
Forecast future cash flows with debt obligations in mind
Adjust budget and forecasts based on actual performance and revised projections
Monitoring and Compliance
Regularly review covenants associated with debt agreements
Ensure compliance with all financial covenants and reporting requirements
Set up alerts for upcoming payments and covenant thresholds
Communication with Stakeholders
Prepare regular updates on debt management for shareholders and board members
Communicate proactively with lenders about the company’s financial position
Involve stakeholders in significant debt-related decisions
