Preventing a crisis
Working Capital Training
FD4 was introduced to a client who was looking to acquire a target business that was about to go into administration.
How we helped
The directors had estimated the likely P/L impact and had therefore established a business case to proceed. However, as the business had no FD, the Working Capital requirement had not been analysed and estimated. The initial cash investment required to cover the growth in Working Capital by the new business together with other expenses was 3 times the initial estimate.
Working Capital Analysis
FD4 carried out a detailed analysis of the target to get an estimate of the Working Capital required.
Action Plan
This work also highlighted actions for Commercial staff to take to reduce the working capital requirement significantly.
Training
Key commercial staff were trained and the acquisition went ahead. As a result of the training and specific action steps highlighted by FD4 the working capital required was only 60% of the initial forecast.
Final Integration
The acquisition happened in early summer 2011 and by end of 2011 was fully and successfully integrated into the parent company.
Lasting Benefits
The working capital training, tracking and awareness remains, yielding a continued and permanent benefit to the company.
FD4 Working Capital
Through improved debtor/credit control and stock planning, we can help increase your working capital to allow for expansion of your operation.
David quickly grasped the key issues and most important drivers of my business. I worked closely with him to reset the budget for the year and value was really added by ensuring I had a good understanding of the key assumptions and I was surprised how quickly I could impact them. David has also helped me think about how to develop the business by using promotions and developing our contact database to generate more sales and cash. With David, I got the expected financial advice and improved financial reporting but the business insights were an unexpected bonus.
Managing Director