| Many companies have annual medical examinations | | | | whether the impending |
| and health screening for their | | | | problem is financial in nature, which may be a |
| employees but are negligent when it comes to | | | | case of over-gearing and cash flow |
| their own corporate check-ups. Poor | | | | problem. Operational and control issues may be |
| management and financial information systems | | | | involved too, such as frauds, financial |
| typically get blamed for management's | | | | scandals, etc. These checks can prepare the top |
| inability to "see it coming." This is because the | | | | management for some exigencies such as |
| checks were done too late.Companies should | | | | a change of political regime, government or |
| know their current fitness level as part of the | | | | terrorist attacks, etc.When the checks revealed |
| regular health check. The | | | | any areas of weaknesses, the company needs to |
| fitness level assesses the state of health of the | | | | prescribe the |
| global, local economic and political arena, | | | | appropriate treatment. The company may need |
| the industry specific issues and dynamics as well | | | | to employ some form of financial reengineering |
| as the issues relating to the company. | | | | to resuscitate the company. If necessary, enlist |
| The trouble is that companies do not know their | | | | the assistance of turnaround |
| state of fitness and often adopt a "firefighting" | | | | specialists. Therefore knowing the state of one's |
| approach whenever the companies are in trouble. | | | | health is inadequate, one needs to take |
| Early diagnosis is always | | | | appropriate actions to remedy the situation.Have |
| better than a post-mortem.On the economic | | | | you done your health check lately and got your |
| front, the check should evaluate some of the | | | | temperature checked? Mike Teng (DBA, MBA, |
| leading economic | | | | BEng, FIMechE, FIEE, CEng, PEng, FCMI, FCIM, |
| indicators such as GDP growth, consumer | | | | SMCS) is the author of the best-selling business |
| confidence and stock market growth. | | | | book "Corporate Turnaround: Nursing a sick |
| Political stability is also critical as political chaos can | | | | company back to health", in 2002. In 2006, he |
| severely upset economic and | | | | authored another book entitled, "Corporate |
| business confidence.On the industry front, the | | | | Wellness: 101 Principles in Turnaround and |
| check should include reviewing the business | | | | Transformation." Dr Teng is widely recognized as |
| trends, consumer | | | | a turnaround CEO in Asia by the news media. He |
| spending, the competition as well as the product | | | | has 27 years of experience in corporate |
| life cycle.At the company level, the check should | | | | responsibilities in the Asia Pacific region. Of these, |
| reveal a full picture of the company's profit and | | | | he held Chief Executive Officer's positions for 17 |
| loss, balance sheet as well as cash flow positions. | | | | years in multi-national, local and publicly listed |
| The use of financial ratios as key | | | | companies. He led in the successful turnaround of |
| performance indicators will help to identify | | | | several troubled companies. He is currently the |
| current and potential troubles. Control | | | | Managing Director of a business advisory firm, |
| procedures should be reviewed to ensure that | | | | Corporate Turnaround Centre Pte Ltd, which |
| the company does not undertake too much | | | | assists companies on a fast track to financial |
| risks and financial burdens.Through these fitness | | | | performance. |
| checks, the company can then determine | | | | |