Information needs of firms in financial distress

During the 1980s, increased competition, limited resources, escalating costs, and turbulent markets caused financial crises in many firms. A new type of professional, the turnaround manager, emerged during these difficult times to guide many firms back to profitability and growth. This research identifies the information needs of turnaround managers relative to what information is important, what information is available, the attributes of important information, and the uses of that information. The first major finding is that information important to turnaround managers is not available at the onset of their engagements; therefore firms experiencing financial crises also are experiencing information crises. The second major finding is that turnaround managers want current financial and working capital analyses broken out by cost/profit centres. They need these analyses reported monthly to improve cash flow and defer debt. These findings are useful for the chief executive officers and management information systems managers as they assess their firms' information requirements for the 1990s.