Signs of financial stress or of actual or approaching insolvency

• . Minimal or no working capital (current assets less current liabilities)
  · Current ratio is less than one
  · Vendor payments beyond trade payable terms
  · Utility statements indicating an intention to disconnect
  · Failure to make required payroll tax deposits
  · Failure to file payroll tax returns
  · Untimely payments of sales tax liabilities
  · Failure to file sales tax returns
  · Pattern of late mortgage or other loan payments
  · Failure to file required income tax returns
  · Failure to deposit corporate income tax liabilities
  · Failure to maintain financial ratios required in loan agreements
  · A pattern of declining sales, gross profitability and net income
  · Opportunities for purchase discounts are not taken
  · Loans by owner or family
  · Compromising accounts receivable for quick payment
  · Unpaid real estate and personal property tax statements
  · Sudden use of factors
  · Unpaid judgments
  · Levies on bank accounts
  · Unfavorable purchase arrangements
  · Sale of assets on unfavorable terms
  · Failure to fund pension obligations
  · Pending litigation and potentially uninsured losses
  · Misrepresentations of financial condition and operations to secure financing
  · Use of credit card cash advances in order to pay previous credit card balances
  · Distributions to owners as returns of capital and loan repayments during periods of unprofitable operations
  · Offers to sell business or assets of the business
  · Efforts to borrow or raise capital are unsuccessful
  · Operating at or near established credit limits with necessary vendors
  · COD terms when credit terms were previously available
  Signs of financial stress or of actual or approaching insolvency (cont’d)
  · Credit cards are at or exceed authorized limits
  · Pattern of bank charges for returned checks for insufficient funds
  · Company is highly leveraged and bank has advised that it will not renew credit agreements
  · Balance sheet indicates the company is insolvent
  · Tax or other liens on property