NATURE OF ASSIGNMENT:
Primary: Company Services / Cash Flow Forecasting & Maximization
Primary Industry: Manufacturing & Processing
Company: An upholstered furniture manufacturer.
Situation: 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 Scope: Focus was engaged to analyze the Company’s business operations and financial reports to identify the impact of its planned off-shore outsourcing and to improve cash flow and liquidity.
Tasks Performed: Our Professionals developed a weekly cash flow forecasting model and loan covenant forecasting tool and implemented budget to actual weekly planning and reporting. A plan to reduce domestic capacity and costs while shifting to overseas production was also put into place.
Results: Operations were successfully moved off-shore, and cash flow and liquidity improved. FOCUS’ 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.