question below analysis

Finance assignment there are some missing information in some parts which needs to be added.some parts are not done and they have the explanation on what to search for. please make sure you read the doc carefully and use reliable sources ( put citation in text ) Analysis on how Thomas cook company went bankruptcy
Please answer the following questions clearly and use credible sources
some questions are partly done but need more info to be added. please look at the highlighted notes
and make sure you understand it before starting.
Failure to Separate Role of Chairman and Chief Executive
At Thomas Cook, there was an overlap of roles and responsibility between the chairman and the chief
executive as their roles were not clearly established. As per the duties and responsibilities of the
chairman in any company, the chairman is responsible for Board leadership as well as the creation of
conditions to ensure its effectiveness in all aspects of its roles. The chairman is responsible for
promoting the highest standards of corporate governance, ensuring a balance of skills among Board
members, as well as ensuring a well-developed induction plan (Hamilton, 2005). On the other hand, the
chief executive is responsible for running all aspects of the business. This was missing at Thomas Cook
hence poor leadership that contributed to the collapse of the company. As a result, the company’s
collapse was disasters that out played in slow motion due to a selection of outside digital professionals
who could have helped an old-fashioned tour company familiarize new reality in the travel industry.
(Insufficiency evidence to understand weather the role were separated well enough, add more and clear
information)
passive board of directors (2)
The board of directors, like Thomas Cook, did not take immediate action to find solutions to the
problems that the company was facing. The directors build up too much debt as well as failing to
grasp the severity of challenges that came with trading with weaker sterling, travel bookings’
moving online as well as some untimely heat waves. (Aydinli, Gu and Pham, 2017). (add more
evidence about the decision making and if they are challenging the CEO or not)
lack of balance of skills in management team – financial, legal, marketing, etc
In its management team, Thomas Cook lacked a balance of skills (what skills?). Among the
countries the company ventured into, such as India, there was a challenge in terms of skilled
workforce (add enought info). This forced the company to establish learning centers to develop a
well-trained talent pool (Walton, 2010). Due to its financial challenges and huge debts, Thomas
Cook was unable to sustain a well-skilled workforce in its various departments such as
marketing, legal, administration as well as the financial department hence leading to its collapse.
Weak Finance Director
Unlike boardroom agreements, Thomas Cook was mainly brought down by incompetence. The finance
director at Thomas Cook was a bad advisor to the company leading to its announcement of a pre-tax
loss of $1.8, most of which came from the impairment charge of $1.4 billion stretching to the merger
with its rival My travel (Loos, 2016). with Michael Healy and Bill Scott as Chief Financial Officers.
search who is the finance director? Do they have? if yes is his background finance? is he
experienced enough?
Lack of Management In-Depth
The board members at Thomas Cook allowed the company to carry too much goodwill on its
balance sheet leading to an $800m write-down (Walton, 2010). The managers lacked
professional correspondence to their roles, such as leadership, organizing, planning, strategy
teamwork as well as control is spite of the fact that they enjoyed authority to undertake all
possible actions to facilitate excellent management of the company. Do they have the
authority to take an action or decide what to do, add more info?
Poor Response to Change (really important to be clear)
Thomas Cook did not respond to technological changes quickly and used old business model.
With its expensive running of street branches, the company found it difficult to compete in the
age of the internet where customers book their holidays online. In the age of a sharing economy,
the company owned a lot of things such as 105 aircraft, 200 hotels with 40,000 rooms, as well as
550 travel agency shops (Hamilton, 2005). Thomas Cook also had its own branded currencyexchange shops at the airports. These all became irrelevant as many holidaymakers changed less
cash and used foreign transaction fee-free credit cards.
(compare it to its revenue + what about their competitor),
Add PRESTCOM Analysis at least 5 of these :
External
Political – Thomas Cook is operating
Regulatory – Laws/Legilslations
Economic – Recession, Exchange rates, Employment, Disposable income, Marginal
Propensity to Consume/Marginal Propensity to Save,
Social – demographics
Technological Internal
Competitor
Organisation
Management
1.
no cash flow plans
Thomas Cook had no cash flow plans with outflows being higher than the company’s
inflows. As a result of huge spending in its operations, the company registered a debt of
1.7 billion pounds, which was called “insurmountable” by the company’s chief executive
Peter Fankhauser (Simmons, 1973). When the company was declared bankrupt, it was
negotiating to obtain $250 million in emergency financing. (Simmons, 1973)
inflows and out flows every year ( out flow higher ? why ? )
Failure Symptoms:
Financial signs – in the A score context, these appear only towards the end of the failure
process, in the last two years
Creative accounting – optimistic statements are made to the public and figures are altered
(inventory valued higher, depreciation lower, etc). Because of this, the outsider may not
recognise any change, and failure, when it arrives, is therefore very rapid(find if they published
wrong report or not )
Non-financial signs – various signs include frozen management salaries, delayed capital
expenditure, falling market share, rising staff turnover (3).
•
Terminal signs – – at the end of the failure process, the financial and non-financial signs
become so obvious that even the casual observer recognises them
The three main mistakes likely to occur are; ( really important part and worth a lot )
1. high gearing – a company allows gearing to rise to such a level that one unfortunate event can
have disastrous consequences (search about that)
2. overtrading – this occurs when a company expands faster than its financing is capable of
supporting. The capital base can become too small and unbalanced (search about that)
the big project – any external/internal project, the failure of which would bring the company
down (search about that)