Turnover turmoil: Know the signs of financial distress

Description

Abstract: Weak financial performance can cause borrowers to default on loans. So, it’s important for lenders to recognize the early warning signs that a company is underperforming. This article discusses three turnover issues that may foreshadow pending financial woes: high employee turnover, unexpected auditor turnover and deteriorating asset turnover. A sidebar explains how agreed-upon-procedures engagements can help lenders evaluate questionable performance, including loan covenant violations.