The latest insolvency index from Experian, an information services company, reveals a positive picture in January, with the number of UK business failures down by more than 10% compared to January 2010.
One thousand two hundred and sixty-six businesses failed in January 2011, representing 0.07% of the UK’s business community. This compares with 1,426 in January 2010. The strength of the UK’s business community also improved year-on-year, with its overall financial strength score improving from 81.16 in January 2010 to 81.49 this year.
Max Firth, managing director of Experian, said: “Our analysis shows that business failure rates are falling steadily and the financial strength of the UK’s business community is improving. Our data also shows that the post-recession business population is beginning to increase once again, with the net number of firms trading up by 1% when compared with last January. Irrespective of the environment, firms need to be vigilant and ensure that they have good insight into the financial risks associated with insolvencies among clients and suppliers. With issues from fulfilling increased orders through to late payment, the knowledge of how these will affect cash flow is imperative.”
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