Lowest turning point

Upturn phase

Highest turning point

Downturn phase

From the company’s perspective

Future expectations/

Profit outlook

· Positive trend

· Increasing

· Positive

· High

· Negative trend

· Declining

· Negative

· Low

Debt burden

· High

· Declining due to an increasing cashflow (used for debt service)

· Increasing due to gearing for transactions

· Constant in comparison to the upturn phase, with a trend towards increasing

· Increasing

Liquid assets

· Low

· Increasing

· Constant in comparison to the upturn phase, with a tend towards declining

· Declining until low

Cashflow

· Low

· Positive trend

· Increasing

· High

· Negative trend

· Declining

Valuation level

· Low

· Increasing

· High

· Declining

Purchase price/

Transaction premium

· Low

· Increasing

· High

· Declining

The macroeconomic perspective

Capital market/Stock exchange

· Low share prices

· Increasing share prices

· High point of the stock exchange

· Declining trend

· Stock market crash

· Decreasing share prices

Economic growth/GDP

· Cyclical trough

· trend towards recovery

· Upward tendency

· Expansion

· Economic boom

· Decreasing tendency

· Economic slowdown

· Recession

Interest on borrowed capital

· Low

· Increasing

· High

· Decreasing

· With a tendency—during the low point as well as during a long-lasting recession—to decrease further

Risk-free market interest rate

· Low

· Increasing

· High

· Decreasing

Market risk premium

· Low

· increasing

· High

· Decreasing—under the premise that the return assumptions are negative

· increasing because of higher risk premiums caused by the crisis

Capital liquidity

· Low

· Increasing

· High

· Declining

Credit conditions

· Cheap

· More restrictive

· Constant in comparison with the upturn period

· Restrictive

· With a tendency—during the low point as well as long-lasting recessions —towards improvement