Financial planning involves managing a financially viable branding or distribution business. This includes meeting all financial obligations and investing in a timely basis in order to improve the brands competitive position in the marketplace.
This Standard has two components. Firstly, financial performance and secondly, re-investment. Both standards must be met by the candidate.
Going forward, the Licensee may need to comply with the following standards, measurement tools and guidelines:
a) Debt to equity ratio must be less than 3:1.
b) Licensees cash flow is adequate to cover annual debt service payments and re-invest in the business.
c) Manufacture and distribution business has adequate working capital to cover its current liabilities.
Using these points, we determine the financial viability of signing with any of the Licensees and the business as a whole.
Failure to meet the guidelines will be taken into account when assessing whether this standard has been met by the Company.
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