An article from Institute of Chartered Accountants in England and Wales24 Nov 2020 11:35
'Eve sleep is a growing business that is yet to achieve profitability. Because it has been in a cycle of raising and spending investor capital, a cautious approach to cashflow and forecasting has been in place from day one, explained Tim Parfitt, the company’s CFO, who was also on the panel. Back in January, when management did their going concern review, they put together a model for the next 12 to 24 months. By March, when the company finalised its accounts, the world had changed. Its board and executive team immediately worked on new models – not just to measure the impact but explore different scenarios to extend its going concern review.
“Our approach throughout the pandemic and our approach for the 2020 accounts is going to be no different to what it has been in the past,” said Tim Parfitt eve sleep’s CFO. “We'll be looking at how much cash would go in the bank at the end of the year, our cash burn rate, what assumptions and sensitivities that we need to apply to our predictions to see how long that cash is going to last and at what point we might need to raise more or when we will start generating cash.”'
– 2020/21 reporting season: going concern lessons from COVID-19 https://www.icaew.com/insights/viewpoints-on-the-news/2020/nov-2020/202021-reporting-season-going-concern-lessons-from-covid-19