The Group has a positive cash flow and the school system model involving payment in advance means that the Group has negative working capital. The Group’s largest operating assets consist of accounts receivable, prepaid expenses and accrued income. Bad debt losses may arise in business relationships or in disputes if a customer becomes insolvent. The Group’s receivables are almost exclusively from the national government, municipalities and authorities, where the risk of insolvency is small. Accordingly, AcadeMedia’s credit risk is deemed low.
Risk relating to loans
The Group has external loans from Nordic credit institutions. The Group also has financial leases. These loans/leases are associated with financial risk in the form of breach of covenants (special loan terms), and interest and loan repayment commitments to credit institutions. As a result of the Group’s strong cash flow, ongoing liquidity forecasts and quarterly reconciliation with credit institutions, the financial risk is low and is being managed efficiently.
Exchange rate risk
Most of the operations are in Sweden and income and payment flows are therefore primarily in Swedish kronor (SEK). Some of the Group’s assets, liabilities and costs are in other currencies than in SEK; mainly NOK and EUR for the Group’s Norwegian and German operations. The Nordic and Germany subsidiaries’ accounts must therefore be translated to SEK when the consolidated accounts are prepared and there is a certain currency risk in the translation to SEK.