The Effect of Board Composition on Financial Distress

This study assesses the impact of board composition on financial distress within the company, with a focus on the UK retail sector. It examines the relationship between board composition and financial distress, explores the challenges faced by the board in managing finance, and provides recommendations for effective financial management. The study is based on the ASDA Company, a prominent player in the retail industry.

The effect of board composition on
financial distress

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background.................................................................................................................................1
Context of research.....................................................................................................................1
Aim and Objectives.....................................................................................................................1
Scope of the study.......................................................................................................................2
Report structure...........................................................................................................................2
Limitations of the report.............................................................................................................2
LITERATURE REVIEW................................................................................................................2
RESEARCH METHODOLOGY.....................................................................................................6
DATA ANALYSIS..........................................................................................................................8
CONCLUSION..............................................................................................................................12
RECOMMEDNATION.................................................................................................................13
REFERENCES..............................................................................................................................16

TOPIC: “To assess the impact of the composition of the board over the financial distress within
the company. A study on UK retail sector.”
INTRODUCTION
Background
Financial distress is considered to be as a situation where the company cannot generate
optimum amount of revenues or income. For higher success of the organization it is considered
to be very crucial for the company to choose the prominent composition of the board (Financial
Distress – Meaning, Reasons, and Tips To Overcome, 2020). This study will highlight on
assessing the impact of the composition of the board over the financial distress within the
company. Furthermore, this study also recommends some of the measures and ways for
management of finance in the company. The present research is prominently based on the ASDA
Company which was founded in the year 1949 by Sir Neol Stockdale and the Peter and Fred
Asquith. It has been headquartered in the Leeds United Kingdom. The ASDA Company mainly
deals within groceries, general merchandising, services relating to finance, etc.
Context of research
The key context of the research is to analyse the significant reason associated with the
composition of the board over the financial distress within the company. The major question
associated with the research study was to examine the relation between the board of composition
and the financial distress. It is significant to manage the financial distress to improve the
profitability and working efficiency of the company.
Aim and Objectives
Research aim
“To investigate the impact of the composition of the board over the financial distress
within the company. A study on ASDA.”
Research objectives
 To understand the concept of financial distress.
 To evaluate the relationship between the board composition and the financial distress.
 To examine the challenges which the composition of board in managing the finance with
the respect of ASDA.
 To recommend some of the measures and ways for management of finance in the
company.

Research questions
1. What do you mean by financial distress?
2. What is the relation between the board of composition and the financial distress?
Scope of the study
The scope of the study is very broad because it helps in bridging the gap associated with
the existing literature and helps in finding relevant set of data associated with assessing the
impact of the composition of the board over the financial distress within the company. The
current research also examines the relation between the board of composition and the financial
distress and attain better results and outcomes. In addition to this the research is also necessary
for the other researchers as well who are also conducting the study on related topic. Thus, this
will act as the basis for the study and will assist them in making their research better.
Report structure
The first chapter associated with the research project is introduction which helps in clearly
outlining the aim and objectives of the study. The second chapter associated with the research
project is literature review. It helps in attaining argumentative and supportive matter by various
prospective google scholar To examine the challenges which the composition of board in
managing the finance with the respect of ASDA.s. The third chapter associated with the research
project is research methodology. This section helps in the selection of the right method to carry
out the study in a significant manner. The next chapter associated with the research project is
data analysis. It is useful in interpreting the various tables and graphs to attain informative text.
The last chapter associated with the research project is conclusion and recommendation. This
section summarizes the complete research study and appropriate recommendation and strategies
has been set out to improve the results and outcomes.
Limitations of the report
The major limitation of the report was time constraint. The researcher however, did not let
this limitation affect its work. The researcher has prepared a complete time line which helps in
completing the task on the timely manner and complete work before deadline. Another major
limitation was to gain access to all the resources required to carry out the project.
LITERATURE REVIEW
To understand the concept of financial distress.

Renssen, (2017) critically evaluated that, the financial statement of the company is useful for
helping the investors in determining the future and the current financial health of the
organisation. The negative cash flow of the company is considered to be a red flag for the
financial distress. This is usually caused because of wides set up disparity between the cash
receivables and cash payments, drop within the working capital and high interest payment. The
company who experience financial distress because of the high debt servicing cost when
compared with the monthly income. The individual or company who experience financial
distress may also be subjected to legal action, Judgement and wage garnishment from the
creditors. Poor profits, struggling to attend breakeven point, low credit worthiness, limited access
to the funds, poor sales, etc. are considered to be as the even signs associated with the financial
distress. This increases the risk of the company and lowers the profitability of the business.
Keasey, Pindado and Rodrigues, (2015) examined the fact that, financial distress is
considered to be a situation where the company struggles to generate enough profit in order to
attain the financial obligation. Unfavourable macro trends, illiquid assets and higher degree of
fixed cost or considered to be the key prominent reason of financial distress. The company who
has been facing financial distress and unable to pay third parties and creditors, they also face
challenges in paying monthly bills and salaries. The financial distress also affects the high-level
management of the company. It also leads to low morale among the employees. It is considered
to be very crucial to keep the organisation immune from any kind of financial distress and knee-
jerk reaction. Subsequently, Pradhana and Suputra, (2015) argued that, financial distress is
considered to be as a situation where the company cannot generate optimum amount of revenues
or income. This way it makes it difficult for the company to meet or effectively pay its
own financial obligations. However, it is mainly because of the high level of fixed costs or a
large amount of illiquid assets. This leads to the downturn of the company and affects the
operational efficiency. Ignoring the key relevant signs associated with the financial distress is
considered to be highly devastating. Financial distress occurs when the revenues of the company
no longer meet the financial needs of the company. Financial distress is referred to as a harbinger
of the bankruptcy and tends to cause a severe damage to the creditworthiness of the organisation.
To provide appropriate remedy to the situation of financial distress, the company must focus on
cutting back the cost or restructuring debt of the company.
To evaluate the relationship between the board composition and the financial distress.

López-Gutiérrez, Sanfilippo-Azofra and Torre-Olmo, (2015) critically evaluated that, the
board of director composition tends to have wide degree of impact on the financial distress of the
company. The board of directors tends to have a non-monotonic relationship with the financial
distress. The board of directors of the company are widely responsible for taking long-term
decisions. Their effective work in controlling and monitoring the management of the company
tends to influence the performance of the company and manage the financial results and
outcomes. Close communication coordination between the higher management of the company
like stakeholders, credit managers and board of directors must come together in order to avoid
situations like financial distress within the organisation. The board of directors also focuses on
improving the profitability of the company by managing the funds accurately.
Chen and et.al., (2018) examined the fact that, the board of director composition of
considered to be as the central of the company who is key objective is to effectively control and
direct the outcomes of the company. Poor corporate governance and the ineffective decision
made by the board of directors is considered to be one of the key prominent reason associated
with the financial distress. The board of directors really focuses on managing and monitoring the
activities of the company to attain better operation efficiency and increasing the performance of
the company. There seems to be no significant effect upon the financial distress of the company.
Subsequently, Keasey, Pindado and Rodrigues, (2015) argued that, for higher success of the
organization it is considered to be very crucial for the company to choose the prominent
composition of the board. When the company has the appropriate composition of the board then
it helps in properly utilizing the finances and take necessary decision. The key significant role of
the board of directors in order to manage the financial distress is to effectively strategize and
plan the goals and objectives for the short-term as well as for the long term. The board of
directors must also focus on reviewing and understanding the goals of the company to avoid
situations like financial distress. The knowledgeable and experienced board of director
composition are considered to be highly useful in improving the results and outcomes and
effectively manage the funds of the company. There seems to be significant relationship between
the board composition and the financial distress. They are highly responsible for providing
complete insight, oversight and foresight to manage the financial distress.
To examine the challenges which composition of board faces at time of managing the finance

In the words of Khurshid and et.al, (2019) there a lot many challenges which the
company has to face in order to manage the finance at the company. The major reason behind
this is that when the company manages the finance the major issue is of the board which is
comprised for the allocation of the finance in all the business activities. Thus, this is the major
challenge which the company faces at time of managing the finance. The major reason
underlying this fact is that when the board is not comprised of good people then the company is
not able to manage the finance in proper and useful manner. For the proper usage of the finance
the most critical thing for the company is that they must make the board with very intelligent and
calm people.
But on the other side Manzaneque, Priego and Merino (2016) argues that the major
challenge in the management of the finance and the composition of board is the personal
differences among the board members. This is particularly a challenge because of the reason that
when the board of the members are having different people comprising in the board then there
are high chances of the personal differences and problem among the people within the board.
Thus, this creates problem when they collectively takes any particular decision for the usage or
the application of the finance into the business. Hence, this will create personal differences
among the employees and the board members and they will not work in coordinates and effective
manner.
In addition to this Ombaba and Kosgei (2017) articulates that the major challenges being
faced by the board of the company in managing the finance is the difference in the thinking
pattern and the perception of the people. This is the major challenge because of the reason that
not every person is same in the thinking pattern and the ability to take and perceive different
things. Thus, this creates many different issues for the company at time when the company has to
take collective decisions. This is majorly because of the reason that the board members are not in
a position to meet at a single point in their thinking and ability to take the decisions.
Along with this as per the views of Shunu (2017) criticizes that the major challenge being
faced by the board of composition within the company is the personal conflicts among the board
people. This is the major challenge because of the fact that if the employees and the board
members are not friendly and cordial among them and are not having proper and effective
relation then they will face many problem and challenge in taking decision relating to the finance
and its proper allocation and use. Hence, in the end it can be said that there are many different

challenges which the composition of the board faces at time of managing the finance in the
company and deal with the issues being faced by the company.
RESEARCH METHODOLOGY
Research type- this is the method or the way through which the researcher tries to
complete the research in good and successful manner. There are two different types of methods
through which the research can be completed that is qualitative and quantitative research (Bell,
Bryman and Harley, 2018). The quantitative is the study which includes analysis of the numbers
and on other side qualitative is the one which includes analysis of the attributes and values
relating to the research topic. Hence, for the successful completion of the research the researcher
has made use of the qualitative research. The reason underlying this is that this method will assist
the company in dealing with attributes and values relating to the topic of research and develop
better and detailed learning and information relating to the topic of research.
Research approach- the approach of research is the various assumptions which are taken
as the base for the selection of the various methods of research. The major two types of research
approach is the inductive and deductive. The inductive is the one which includes the framing of
aim and objective and the deductive is the one which includes framing of hypothesis. For the
effective completion of research, the inductive has been used and framing of aim and objective
provides a clear direction to researcher where they need to go (Connaway and Radford, 2016).
Research philosophy- the philosophy for the research is defined as the values and beliefs
which are present beneath the selection of the method of research. This is majorly of two type
that is interpretivism and positivism. The interpretivism is the one which includes integration of
interest of human within the research and on the other side the positivism is the one which
includes using the factual information as base. Thus, in order to complete the research in
successful manner the use of interpretivism was used as this increased the interest of human
within the study and because of this the research was conducted in successful manner.
Data collection- this is defined as the gathering and assimilation of the data relating to
the topic of research. This is necessary as this will assist the researcher in making the analysis of
this data in order to reach to some of the conclusion. This data can be collected majorly from two
sources that is primary and secondary data (Rosenthal, 2016). The primary data is the one which
is collected for the first time and is being used in the research for the first time as well. On the

other side the secondary data is the one which is already published data and is being used in the
other researches as well. Hence, for the successful completion of the present research over the
effect of board composition on the financial distress the major focus has been made on the
secondary data. The reason underlying his fact is that the secondary data has been used in other
researches as well and this is more authentic and valid and reliable.
Data analysis- It is prominent in the selection, summarizing and effective collection of
the data. It is associated with the effective interpretation of the relevant set of data which has
been collected. This is specifically done through analytical knowledge by determining the trends
and patterns. It is categorized into two types which are thematic and SPSS data analysis.
Thematic analysis is significant to analyse the qualitative research sets by interpreting each
themes in a reliable and prominent manner. It is useful to analyse the patterns and trends related
with the theme. It is useful to provide rich description related with the data. SPSS analysis
evaluates complex set of data using descriptive statistical data and other tools. For the present
research the researcher has made use of the thematic analysis. For doing the thematic analysis the
researcher has converted the objectives in themes and then the secondary research was conducted
on that. Further the data relating to the themes was discussed with views of different authors and
writers.
Ethical consideration- It is one of the key prominent part related with the research. The
observant of the research must not be subjected to any harm and appropriate set of dignity and
respect has been maintained. The researcher has also maintained appropriate level of
confidentiality has been effectively maintained. Informed consent from the observant has been
taken before the start of the study (Nind, Hall and Curtin, 2016). Anonymity of the participant
has been ensured. The data are fully encrypted and personal information of the respondents are
kept private. Exaggeration linked with the aim and objectives has been avoided. No misleading
information has been used within the research. Communication to the participants has been done
with utmost degree of transparency and honesty.
Reliability and validity- The researcher has maintained complete level of anonymity and
reliability while effectively carrying out the research study. In order to effectively ensure the
relatability and validity of the study, the researcher will cite the data and no misleading
information will be sued (Wilson, 2016). The same set of questions has been asked from the
variety of the employees and management of the company to draw valid conclusion. All the data

has been gathered from the reliable sources. Consistency has been maintained in order to
maintained to improve the reliability and validity linked with the specific research study.
DATA ANALYSIS
Concept of financial distress
With the analysis of the secondary research that is relating to the financial distress it was
identified that the financial distress creates a negative impact over the working of the company.
By the evaluation it was illustrated that the financial distress is the position wherein the company
is not in a position to develop or earn enough money or revenue in order to pay all of its
liabilities. Thus, with the analysis of the data it was identified that if the company is having more
of the financial distress then this is not good for the company. The major reason underlying this
fact is that when the company is having problem in dealing with management of finance then
they will not be able to manage their working and attainment of the objectives. Hence, it is not at
all possible to manage the business in profitable and effective manner then they will face many
different types of problems and issues in the management of finance and other business
operations.
Further Lian (2017) states that with the evaluation of the secondary data it was seen that
the major cause of the financial distress is the reduced income at the same time the same
expenses. This means that the income of the company has reduced but the expenses of the
company are same and this have a great impact over the profitability of the company. The major
reason underlying this fact is that if the income of the company has reduced but the expenses of
the company are same then this will have a great impact over working. This is particularly
because of the reason that when the expenses of the company are same or constant then the
company has to arrange for extra income and if that is not possible then they will have to take
loan or financial help from other people or banks. Thus, this will create more financial obligation
for the company which they have to pay and it might be possible that the company will not be
able to manage it and they may suffer huge financial losses.
Furthermore, with the assistance of the secondary data and its evaluation it illustrated that
another major cause for the company in facing financial distress is the poor management and
application of the money. This has a great impact over the working and the decision making
policy of the company. This is due to the reason that when the working of the company includes
much of the poor finance management then this will have a great impact over the working of the

company. The cash management includes the proper allocation and application of the
management of the cash in order to manage the working in such a manner that this will not affect
the working in negative manner (Mselmi, Lahiani and Hamza, 2017). Hence, in the end it is said
that the company need to manage its financial distress as this will have a great impact over the
working of the company and the profitability of the company as well. As there is a need to deal
with the cause and for that identify which key area need to be more attention and start taking
action accordingly so that it will not cause any negative impact upon entire company.
It is also analysed that poor financial management is consider one of the biggest cause of
financial problem and this is because people do not have a skills to manage money and that is
why, there is a need to recruit the employees who have enough experience to complete the task.
Further, financial stress is all about to face to difficulties in financial commitments due to
shortage of money, but Asda have a strong brand image and due to having good board
composition, company is able to manage the stress and leads to minimize its impact upon
business performance as well.
Theme 2: the relationship between the board composition and the financial distress
There is a positive relationship between the board of directors and financial stress such
that long tenure board has a high chance of facing financial distress and they also provide the
way to a firm so that they overcome from any problem. Also, Boards composition plays an
important role in the decision making of a firm and that is is why there is high association
between the financial stress and Board. For example, in ASDA, company follows hierarchical
organizational structure and that is why, each and every roles-responsibilities are divided in each
department, even managers and senior members consult with Boards in order to make the
decision in favour of company. Basically financial distress is related to the situation where firm's
cash flow are not enough to meet the requirement set by the firm and this is all depend upon the
company's board of directors because they took important decision which in turn leads to take a
business at success level.
Vafeas and Vlittis (2016) stated that the Board of directors is a group of people who are
elected by the shareholders and are also responsible for the strategy of a company by hiring CEO
or management team. In the same way, ASDA also have proper structure which in turn leads to
evaluate the company's performance through financial statement and further analyse the problem
which company face. As board have a power to hire and fire the managers if their work is not

met their expectation, even they also has a control over long terms goals of a company whereas
management is only deal with daily affairs. Thus, it is stated that there is a positive relationship
between the boards and financial performance of a company. It is so because the independent
number do not have an enough knowledge about a firm and this in turn influence the poor
decision making. Hence, if board perform the work with proper collaboration with its employees,
managers then it will be more beneficial for the company to be at further level of success. So,
more independent board can monitor management better and thus, improve companies financial
performance as well.
Isik and Ince (2016) also share their own opinion that the presence of outside directors on
the board of directors has actually no effect upon the financial distress and basically, reduce
income, poor money management and no savings are consider some causes of financial distress.
But if the company have a board composition then it will be beneficial for the firm because all
the decision are taken in favour of a business which in turn assist to reduce the chances of
financial stress. Similarly, Board of ASDA keep changing its strategy in order to make sure that
customers are attracted, employees assist to meet the define aim and also, keep focusing on
dealing with default issue instead of enhancing the firm value, because it is perform by
management team. Therefore, it is examine that there is a positive relationship between financial
distress and Board composition.
It is also analysed that in today's business, restoring to a bankruptcy protection law is
common among all sizes, even during recent financial crisis, most of the firm fell into distress
and this is because of not taking better decision in favour of company. Whenever the company
face any issue or challenge, the board of directors conduct a meeting and try to generate the
solutions which in turn help to meet the define aim. Sayari and Mugan (2017) stated that linking
board configuration to financial distress shows that smaller boards with more independent, on the
other side, outside directors are more effective in order to avoid bankruptcy. As Board activity is
also directly associated with the financial distress such that when the meeting is introduced,
every members of Board shows their views in order to make the right decision, hence this shows
that there is a link between board activity and firm value. Similarly, Asda also involve all the
important member of a company before implementing any decision which in turn leads to
improve the results and determine the loopholes as well. That is why, it is stated that if the board
composition within a firm is strong, then the chances of leading a firm is increases.

Theme 3: To examine the challenges which the composition of board in managing the finance
with the respect of ASDA
There seems to be wide degree of significant changes which in turn has been faced by the
company because of the financial distress. Managing the key significant finances of the company
is referred to as one of the key prominent challenge which has been faced by the organization.
The financial economic crisis is considered to be another major challenge which has been faced
by the board of directors. This leads to low degree of financial distress and affects the financial
health of the company. It is very crucial to manage the finance of the company with high degree
of accuracy and efficiency. Personal difference and clash in the opinion, knowledge and mind set
of the board of directors is one of the key challenge which has been faced by the company. This
in turn influence the decision making capacity and leads to delay in the attainment of the
financial goals and objectives.
The conflict in the opinion affects the individual person. Keeping accurate data of the
records can highly influence the board and impose high degree of challenge in managing the key
finance of the company. In addition to this Ombaba and Kosgei (2017) articulates that, major
threat to the business is imposed when there is a financial crisis. It becomes difficult for the
company to effectively arrange funds and helps in improving the key results and outcomes. In
this time of pandemic wide degree of financial challenge has been faced by the company. Insider
trading is one of the biggest challenge which has been faced by the board of directors. It is
important to develop a security area which helps in improving the key financial condition of the
company. No proper financial disclosure is another major challenge which has been faced by the
board of directors of the company. It is very important to effectively disclose the key significant
facts which helps in the better functioning and high degree of standards to meet the financial
needs of the company.
Not complying with the legal and the financial laws also tends to impose high degree of
major challenge on the financial distress upon the board of directors of the company. There
seems to be high degree of challenge on the board of directors because of the key external factors
which in turn could largely influence the results and outcomes linked with the study. Ineffective
financial analysis and incapacity for the raising of the funds tends to impose high degree of
challenge on the financial health of the company. The board of directors must focus on

maintaining optimum level of fund and helps in meeting the key significant goals and objectives.
The board most always comprise of knowledgable, prospective and skilful people which helps in
taking key strategic decision at the time of financial distress.
Sari, Saputra and Siahaan (2018) also shows their views and explain that sometimes due
to personal conflicts between board of directors, company faces issue in order to manage the
finance. As a result, there is no transparency within its operations and this in turn affect the
results of a firm. Also, it is analysed that in top most companies, personal conflicts is affected the
professional working environment and that is why, it leads to affect the overall performance of a
company. That is why, other BOD do not perform or take any steps in order to manage the
finance as well as performance. On the other side, in the context of Asda, If this type of
challenges faces by the firm then other board of director takes actions immediately in order to
meet the define aim. If the actions are not taken immediately then it will affect the managers as
well as employees performance in opposite manner.
CONCLUSION
This research study is significant in effectively summarising that, financial distress is a
state where the company cannot effectively generate significant amount of revenues for the
specific period. It is highly crucial for the company in effectively choosing the high degree of
success rate by effectively choosing the right degree of composition of the boards who have the
key skills, knowledge and capability to improve the financial capability of the company. The
financial statements of the company is effectively used to n determining the future and the
current financial health of the organisation. However, the negative flows of the cash is one of the
key sign related with the financial distress. This eventually makes it way too difficult for the
company to meet the key financial obligations. It has been concluded that, the financial distress
tends to occur when revenues of the organization no longer meet the financial needs of the
company. The board of director composition has significant degree of impact on the financial
distress of the organization. Close communication and effective coordination associated with the
higher management of the organization like credit managers, stakeholders and board of directors
must prominently come together to avoid situations linked with the financial distress. It is
important to take strategic set of decision to met the financial needs and outcomes. However,
there seems to be significant relationship between the board composition and the financial

distress. The composition of the board is useful to provide effective foresight which helps in the
management of the financial distress. There are significant level of challenges which
composition of board faces at time of managing the finance. Ineffective composition of the board
who has no knowledge related with the finance of the company can adversely impose major
challenge on the board. Personal difference in the opinion impose another challenge on the board
while managing financial distress. This research mainly focuses on qualitative study where
secondary research has been carried out. The research is carried out in ethical manner and has
also filled the gap related with the research questions. Poor management and ineffective
allocation of the money is the major reason of the financial distress within the company.
Following effective organizational structure helps in assigning of the appropriate roles and
responsibilities which further helps in the management of the situation of financial distress. It has
been summarized that, the appropriate recommendation is to give complete training to higher
management of the company which helps in the management of the finance. It has been
recommended to effectively record the data within the financial statements and also analyse them
on a timely manner in order to take relevant set of decision. Positive relationship between the
boards and financial performance of a company helps in effective management of the board and
leads to higher growth and improved level of efficiency of organization. The board carry out task
with proper collaboration helps in improving the financial performance of the company with
utmost accuracy and relevance.
RECOMMEDNATION
From the above all discussion it is clear and evident that the management of the financial
distress is very essential as finance is the only resource without which company cannot function.
Hence, it is very essential for ASDA to manage the financial distress and for this some of the
recommendation for managing financial distress are as follows-
The first and foremost strategy recommended to ASDA is that they must have all the
records of the financial transaction. This is the most essential and basic step in managing the
financial position as if all the financial transaction will be recorded in proper manner then they
will have knowledge of what is happening within the company. This proper and timely recording
of the financial transaction ensures that the company is having knowledge that where the finance
of the company is being used and whether it is proper or not.

Along with this another major recommendation is that optimum utilisation of finance
within the company. This is basically because of the reason that when the finance will not be
used in proper and effective manner then this will result in mismanagement of the finance in the
business. Thus, for this it is essential for the business that they must first analyse what is the
requirement of the finance that is where is the need of finance and then allocate finance to that
activity. Hence, this will assist ASDA in managing the business and make optimum utilisation of
the resources.
In addition to this another major recommendation for ASDA is to employ the person who
is having expert knowledge in the field of managing finance. This is pertaining to the fact that if
the person is having expert knowledge relating to the management of finance then they will
ensure that whole finance of the business is used in optimal way. Thus, this will result in proper
management and use of the finance and will assist company in managing the profitability of the
company and its performance as well.
With respect of this another major recommendation for the company ASDA is that they
must focus on making the budgets. This is necessary because of the reason that when the budget
will be prepared then this will guide the employees that how they have to make proper and
optimal use of the financial resources. This will help ASDA in directing the employees that how
they have to employ the finance and make ideal use of the financial resources.
Along with this another major recommendation is that ASDA must have time to time
scheduling of reports relating to finance. This is essential as if the company is not having the
record that where the finance has been utilised then this will create a good impact over the
financial position of the company. Thus, this will assist ASDA in time to time manage and
monitor the application of the finance. This is due to reason that the finance is recorded in the
terms of its use and this will assist the company in getting the knowledge that in which activity
how much finance need to be allocated. Thus, this record also assists the company in managing
the financial projection and estimation for the future.

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Financial Distress – Meaning, Reasons, and Tips To Overcome. 2020. [ONLINE]. Available
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