Financial Diagnostics

Farringdon Consultants' financial diagnosis involves judgment upon the financial health of the company, the strengths and weaknesses of financial management through which past, present and future risks arisen from the financial situation can be estimated, following the reduction of risk and improvement of results. The finality of the financial diagnosis consists in offering financial information to people both from inside and outside the company. The financial and economical diagnosis is carried out with a view to evaluate the activity of the company, in order to elaborate some decisions allowing the improvement or the restoration of the company’s performance.

Economical and financial diagnosis guides the investment, financing and dividend distributing decisions, elaborates financial forecasts, evaluates the expected yield, helps in continuing or initiating activities with various partners.

Farringdon's financial diagnosis represents part of the analysis and diagnostic activities that will be carried out to form a comprehensive evaluation of the situation and performances of the company. Consequently, the financial diagnosis can only offer a partial and specialized look at the company’s financial situation and performance, its goal being oriented on studying: the company’s capacity to ensure immediate and long-term solvency, i.e. avoiding the risk of bankruptcy; the company ability of maintaining a satisfactory level of performance, considering the resources engaged in the activity, the ability to refinance the activity, to own enough resources to avoid financial risk.

Financial diagnosis as carried out by Farringdon Consultansts will help to answer to four essential questions regarding:

  • Growth: how the company’s activity carried out throughout the examined period and what was the growth rate compared to that of the sector;
  • Yield: whether the results obtained are proportionate with resources used and whether the growth was accompanied by a satisfactory yield;
  • Balance: what is the financial structure of the company and whether it is balanced or not, in the context of the ratio between the capital masses for a suitable financial support;
  • Risks: their nature, whether the company has weaknesses and whether or not there is an increased bankruptcy risk.