Working Capital Optimisation

Working capital improvement services include:

  • supporting clients in understanding the scope for the sustainable release of cash from working capital;
  • helping clients identify what steps need to be taken to release the cash and providing the implementation expertise to enable them to achieve their optimum level of working capital;
  • helping clients unlock cash to reduce their overall funding requirements or to exploit acquisitive or organic investment opportunities.

These performance improvement measures are often complemented by the provision of enhanced visibility of future cash flows to support discussions with creditor and stakeholder groups.

Common indicators of a need to review cash and working capital management include:

  • High levels of working capital investment relative to turnover;
  • Deteriorating working capital metrics and lack of accountability;
  • An inability to manage seasonal fluctuations.

We provide advice on working capital optimisation solutions and support management with the implementation of working capital improvement programmes.

Working capital is one of the most significant investments that many businesses make, but could also be one of the most inefficient.

Excess working capital often moves up organisations’ agendas when there is a need to free cash in order to invest in other areas or to relieve cash flow/liquidity pressures.

Organisations typically initiate short term actions to alleviate these pressures such as, aggressive cash collections from customers; delaying payments to suppliers; and reducing inventory levels. Often these actions are short lived and shelved once cash flow and general liquidity pressures are relieved. However, no lasting underlying improvement and efficiencies occur.

Short term cash management services include:

We support our clients where cash pressure is acute and requires a very active management approach to ensure short-term survival. We support management through:

  • Rapid implementation of short-term forecasting improvements to improve visibility of cash requirements;
  • Active cash management to ensure all possible means of cash generation is tapped to ensure survival;
  • Coaching, advisery support and hands-on assistance where required;
  • Providing an independent view of cash requirements and cash management options;
  • Preparation, negotiate and execution assistance during a refinancing or turnaround plan.

Business liquidity review services include:

We work with management to conduct a review of the liquidity and related cash flow forecasts of a business to understand and analyse drivers of cash flow.

CapSol Advisers Limited

This work requires us to assess amongst others, intra month peak requirements, vulnerabilities and potential upsides. 

This provides a framework for a borrower to provide it's lenders with a more robust view on whether it has adequate liquidity to continue operating normally, thereby allowing time for the lenders to consider new or revised debt funding options.

If required, we conduct high level ‘stress tests’ and analysis of the organisation’s business plan. 

We can help the board take a view as to whether the business plan provides a reasonable basis to determine the organisation's optimal debt capacity and to enable making more sound borrowing decisions.

This analysis may, inter alia, include:

Carrying out a review of an organisation's track record plus normalising one-off exceptions, in order to provide a basis to test and challenge management's business plans; and
Assessing revenue, costs and cash conversion assumptions included in the plan, and commenting on their reasonableness.

Should you wish to provide us with any feedback or require further general information about our services please submit your feedback or enquiry via the Contact Us page of our website.

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