Which activities are most important and why

Annexes 7 Checklist - the 30 most important activities for the rating Action required 1. Analysis of the annual financial statements, in particular critical assessment of the equity ratio, dynamic leverage and interest coverage (“fi nancial rating criteria”) 2. Analysis of the market attractiveness of the industry (“Industry rating”) 3. Assessment the megatrends for the future prospects of the company 4. Assessment of the company's potential for success (strengths and weaknesses) 5. Creation of an inventory of the most important risks 6. Calculation of the aggregated overall risk position 7. Assessment of one's own “rating level” and identification of “critical rating” Criteria “8. Development or specification of the (value-oriented) corporate strategy 9. Development of a balanced scorecard for strategy implementation 10. Development of operational corporate planning (business plan) 11. Development or expansion of a controlling system (including budgets and deviation analyzes) 12. Development a financial or L iquidity planning 13. Development of a risk management system 14. Development of an early warning system (sales forecast system) 15. Development of a risk policy with limits for risks 16. Development of an action plan with risk management measures 17. Transfer of "marginal risks" to third parties (e.g. B. Insurance or capital market) 18. Assessment / strengthening of management competence 19. Assessment / strengthening of the company's competitive advantages (quality, service, sales) 20. Consistent cost management and increased efficiency of work processes 21. Reduction of capital tied up in inventories and receivables 7. Annexes424 Need for action 22. Capital increase, e.g. B. Admission of a venture capital company as a partner 23. Provision of collateral for the bank 24. Personal guarantees (if unavoidable!) 25. Development of a communication strategy with the house bank 26. Timely provision of the annual financial statements and the business plan to the house bank 27. During the year Reports on the development of the earnings and liquidity situation to the house bank 28. Information of the house bank about the corporate strategy and its implementation (using Balanced Scorecard key figures) 29. Timely information of the house bank about additional capital requirements 30. Consistent compliance with the credit limits promised by the bank for entrepreneurial decisions - a decision compass (A) The relevance of business management methods - and their problems in practice Obviously, the success of a company is largely based on the quality of the decisions made by its management, in particular by the entrepreneur ode r Entrepreneurs. Unfortunately, in practice it can be stated that these decisions - especially in medium-sized businesses - are relatively little supported by the use of business methods based on rational decision theory. The main reasons for these deficits are as follows: • Many modern business methods are so complicated that they can only be used meaningfully by a specialist - be it a management consultant or an in-house staff unit. • Another problem is that using many business methods requires information that is not available. What use is it to know how, according to the theory of monopolistic competition, the best-profit sales prices are to be determined if one of the relevant parameters, the “elasticity of demand”, is not known and can hardly be determined? • In medium-sized companies, all important decisions are often prepared by the owner himself and largely made alone. Since this person is typically the most important person in the company and is burdened with a large number of operational tasks, there is usually too little time available for important decisions. • Changes to the company organization, major investments or new marketing strategies are decided without considering all the relevant consequences for the company - and especially the risks. External advice often primarily includes tax or financial aspects, but not key business management issues.