10. How well could your company withstand a 10 percent increase in its pension fund contributions? ###
1. How well could your company survive a 10 percent depreciation or appreciation in your main trading currencies – namely Economics, those in your home territory and those of your main customers and suppliers?
6. What would be the impact of one of your company’s top three suppliers becoming insolvent?
2. How well could your company survive a 25 percent increase in the interest rates charged on your variable rate debt?
8. How well are you able to survive a major supply chain disruption such as a port strike, aviation disruption (like the ash cloud), or natural disaster?
7. How much finance do you have extended to your company’s top three suppliers and/or customers?
3. How quickly can your company identify and replace all of its relationships with one of its leading banks, in the event of a run on that financial institution?
9. How much of your company’s costs are impacted by variations in raw material prices? How well is this hedged?
5. What would be the impact of one of your company’s top three customers becoming insolvent?
4. What percentage of your company’s debt will need to be rolled over or replaced in the next 12 months?
Over the past couple of years, a number of U.S. and European banks have undergone so-called stress tests. These were intended to tell regulators, as well as the banks’ customers, if the banks were strong enough to withstand a persistently weak economy. While corporate America didn’t have to participate, companies could benefit from doing a similar assessment themselves, says Tom Nelson Economics, cash management specialist with Wall Street Systems. In fact, Nelson outlined ten questions that every corporate treasurer should ask him or herself:
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