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Exit of non-core and under-performing assets

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Assessing non-core and underperforming assets

With equity markets sharply down, a significant number of profit downgrades have already been linked to COVID-19. Corporates are now challenged to use their capital effectively, particularly if that capital is trapped in underperforming businesses. The anticipated business disruption as a result of COVID-19 is also expected to put more pressure on cash, with a need to deploy capital to protect core business operations. This article discusses how companies need to assess underperforming and non-core business assets as they face unanticipated pressure on working capital lines and liquidity.

Topics covered in this article:

  • How COVID-19 has shifted strategic directions and how that impacts subsidiaries
  • Factors businesses should consider when assessing cash flow and liquidity
  • Stakeholder focus on underlying performance and financial strength of a business

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