Industry:Manufacturing & Processing
Service:Cash Flow Management
Company:An upholstered furniture manufacturer
The company was experiencing a cash shortfall and running out of availability on its approved over advance. Its lack of cash was a result of weaker performance than originally expected, poor financial management, increased working capital needs and its change over to an off-shore outsourcing program, which was required for future profitability.
Focus was engaged to analyze the Company’s financial reports to identify the impact of its planned off-shore outsourcing and to improve cash flow and liquidity.
- Developed a weekly cash flow forecasting model and loan covenant forecasting tool
- Implemented budget to actual weekly planning and reporting
- Implemented a plan to reduce domestic capacity and costs while shifting to overseas production
- Operations were successfully moved off-shore, and cash flow and liquidity improved.
- The cash flow forecasting models allowed the Company and its lender to determine additional cash needs.
- The lender eliminated its over advance position and is now in a better position to ride down inventory levels if sales do not materialize.