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:
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.
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:
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.
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.
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.
Copyright © 2012 - 2017 CapSol Advisers Limited | All Rights Reserved
CapSol Advisers Limited is incorporated as a private limited liability company in England and Wales under registration number: 8281518
London, UK +44 (776) 658 1854 firstname.lastname@example.org