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.
This work also highlighted actions for Commercial staff to take to reduce the working capital requirement significantly.
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.
The acquisition happened in early summer 2011 and by end of 2011 was fully and successfully integrated into the parent company.
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 has had a massive impact on our business in a short time. Our company now has the ability to forecast and plan rather than simply trying to achieve slightly better than prior year. His unique toolkit has restructured our company into three contribution centres each with a manager who owns the numbers and is motivated to deliver.