Hello!
I was asked this question in an interviewer-led and I wasn't able to come up with any structured framework: "Our client thinks her company has a debt problem. How would you approach this problem?"
Some aspects I would consider:
1. Long Term Financial Debt:
a) relative value (compared to Revenues, Profits, Equity)
b) average length
2. Short Term Financial Debt:
a) relative value (compared to Revenues, Profits, Equity)
b) average length - not really useful
3. Net Working Capital
a) NWC days
b) NWC on revenues
Is this an acceptable answer? What would you add/cut?
Thank you so much!
Best, Anonymous
