Strategic Financial Planning - (Cash Management, Forecasting)
Challenge
A wholesale distributor with over $100 million in revenues was about to launch a new product and needed assistance with cash management. The end goal was to determine if they had a sufficient cash flow to fund this new operation.
How we helped
F&A worked with the finance and accounting department to develop a bottom-up cash flow model along with a dynamic sales forecasting tool to estimate future cash requirements. F&A professionals designed a number of "what if" scenarios and discovered that the current business model could not support the launch of this new product without additional capital. F&A made a recommendation to the board of directors and developed a plan to mitigate the risk to the business.
Outcome
We successfully influenced the board and secured a loan that would satisfy the cash requirements needed to successfully launch their new product. The dynamic sales and forecasting model was used by the client to better estimate sales, calculate inventory levels and to schedule out future cash requirements.