{"id":40081,"date":"2021-08-13T09:55:26","date_gmt":"2021-08-13T07:55:26","guid":{"rendered":"https:\/\/wordpress-783423-2671269.cloudwaysapps.com\/?p=40081"},"modified":"2025-02-06T13:42:03","modified_gmt":"2025-02-06T12:42:03","slug":"how-to-explain-critical-balances-convincingly","status":"publish","type":"post","link":"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/","title":{"rendered":"How to explain critical balances convincingly"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"40081\" class=\"elementor elementor-40081\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-61769d52 e-flex e-con-boxed e-con e-parent\" data-id=\"61769d52\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-15da517b elementor-widget elementor-widget-text-editor\" data-id=\"15da517b\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<strong>When a company&#8217;s balance sheet positions don&#8217;t look as rosy as they should, good communication is needed to satisfy investors. Companies need to show that they have the situation under control. <\/strong>\n<p style=\"text-align: left;\"><em>by <a href=\"https:\/\/www.cometis.de\/en\/cometis-ag\/team\/\">Claudius Krause<\/a>\u00a0\u00a0<\/em><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-40083 size-full\" src=\"https:\/\/www.cometis.de\/wp-content\/uploads\/2021\/08\/eng_BannerBlogbeitrag_How_to_explain_critical_balances-scaled.jpg\" alt=\"How to explain critical balances convincingly\" width=\"2560\" height=\"1322\" \/><\/p>\n<strong><span style=\"color: #00225f;\">Wiesbaden, August 20, 2021. <\/span><\/strong>Good communication is particularly evident in a crisis situation. One of the trickiest tasks for board members and IR managers is how to explain complicated and critical balance sheets to investors in a clear, understandable and convincing way. The balance sheet is an important source of information for investors to assess the economic health and resilience of a company\n\n<strong>Clarify negative balance sheet positions<\/strong>\n\nBut what happens when retained earnings are increasingly reduced, equity capitalization melts away, or the level of debt has already reached the pain threshold of what is customary in the market? What if, in uncertain times such as the Corona years 2020 and 2021, significant financial liabilities fall due and follow-up financing is required? Or what if significant parts of the balance sheet consist of intangible assets and investors see a risk of significant impairment?\n\nNothing can be done about the balance sheet structure in retrospect \u2013 but a company should recognize the potential concerns of the capital market in advance and think carefully about how and when it communicates the critical issues. After all, the capital market accepts clearly and stringently moderated special situations, whereas poor or euphemistic communication is punished by investors.\n\n<strong>What does the balance sheet mean in the big picture?<\/strong>\n\nIt is always important to keep the &#8220;big picture&#8221; in mind, i.e. to explain the balance sheet in the overall context of the operating business and the corporate strategy. Why, for example, is it acceptable for a company to take on high levels of debt in the current situation? Why might it even make sense to take this step? What concrete measures is the management taking to remain capable of acting in line with the corporate strategy in the future?\n\nForward-looking, regular and clear communication is the key to success here. This ensures that the capital market is not taken by surprise and signals to investors that management is in control. This is how you create trust \u2013 especially in difficult times.\n\n<strong>Do you need support to communicate skillfully and transparently with your investors, even in times of crisis? <\/strong><a href=\"https:\/\/www.cometis.de\/en\/investor-relations\/\"><strong>Contact<\/strong><\/a><strong> the specialist for professional IR work<\/strong>\n\n<hr \/>\n\n<img decoding=\"async\" class=\"alignnone\" style=\"width: 30%; height: 30%; float: left; margin: 5px 20px 20px 0px;\" src=\"https:\/\/www.cometis.de\/wp-content\/uploads\/2020\/02\/CK.png\" alt=\"Thorben Burbach\" width=\"887\" height=\"946\" \/><strong><a href=\"mailto:krause@cometis.de\">Claudius Krause:<\/a> Senior Consultant<\/strong>\nClaudius Krause holds a degree in business law with a focus on international business law and banking and capital markets law. He worked for a German commercial law firm in Germany and China. He has also managed numerous investor relations and corporate communications projects.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>When a company&#8217;s balance sheet positions don&#8217;t look as rosy as they should, good communication is needed to satisfy investors. Companies need to show that they have the situation under control. by Claudius Krause\u00a0\u00a0 Wiesbaden, August 20, 2021. Good communication is particularly evident in a crisis situation. One of the trickiest tasks for board members [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":98872,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[88,111,100],"tags":[288],"class_list":["post-40081","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-press-release","category-pressemitteilung","tag-2021-2"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.2 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to explain critical balances convincingly - cometis AG<\/title>\n<meta name=\"description\" content=\"Companies need to prove investors that they have the situation under control when balance sheet ratios look bad.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to explain critical balances convincingly\" \/>\n<meta property=\"og:description\" content=\"Companies need to prove investors that they have the situation under control when balance sheet ratios look bad.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/\" \/>\n<meta property=\"og:site_name\" content=\"cometis AG\" \/>\n<meta property=\"article:published_time\" content=\"2021-08-13T07:55:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-06T12:42:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.cometis.de\/wp-content\/uploads\/2024\/12-old\/Cometis-Mobile-Logo-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"171\" \/>\n\t<meta property=\"og:image:height\" content=\"31\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Assistenz cometis AG\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Assistenz cometis AG\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/\"},\"author\":{\"name\":\"Assistenz cometis AG\",\"@id\":\"https:\/\/www.cometis.de\/en\/#\/schema\/person\/5359bae3178840cd846706150aa69cd1\"},\"headline\":\"How to explain critical balances convincingly\",\"datePublished\":\"2021-08-13T07:55:26+00:00\",\"dateModified\":\"2025-02-06T12:42:03+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/\"},\"wordCount\":443,\"publisher\":{\"@id\":\"https:\/\/www.cometis.de\/en\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.cometis.de\/wp-content\/uploads\/2022\/06\/icon_newsroom.svg\",\"keywords\":[\"2021\"],\"articleSection\":[\"News\",\"Press release\",\"Pressemitteilung\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/\",\"url\":\"https:\/\/www.cometis.de\/en\/how-to-explain-critical-balances-convincingly\/\",\"name\":\"How to explain critical balances convincingly - 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