IBERSOL | 2019 Sustainability Report
CORPORATE PROFILE Credit risk The Ibersol Group’s main activity is sales paid in cash or by credit/debit card, which means there are no relevant credit risk concentrations. As regards accounts receivable, risk is limited to the Catering and Franchising business areas, which account for approximately 6% of consolidated turnover. The Group began monitoring accounts receiv- able more regularly in order to: • Control credit granted to customers; • Analyse the ageing and recoverability of accounts receivable; • Analyse the risk profile of customers. Liquidity risk Liquidity risk management implies maintaining a sufficient amount in cash and bank deposits, the feasibility of consolidating floating debt by using a suitable amount of credit facilities and the ability to liquidate market positions. Cash flow needs are managed based on annual planning, which is reviewed every quarter and adjusted on a daily basis. In accordance with the dynamics of the underlying busi- nesses, the Ibersol Group flexibly manages commercial paper and negotiates credit lines available at all times. Capital Risk The Ibersol Group seeks to maintain a level of equity capital suited to the characteristics of its main business (cash sales and supplier credit) and to ensure continuity and growth. The balance of the capital struc- ture is monitored based on the financial leverage ratio (defined as: net remunerated debt/net remunerated debt + equity capital), with the purpose of situating it in the 35%-70% bracket. 26
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