Close the gap to world class
Economic uncertainty, rising debt levels, and increased scrutiny from shareholders and analysts are driving greater focus on maximizing cash flow through sound working capital management.
Some companies are rising above these challenges. By adopting working capital management best practices, these companies are able to yield substantial returns in service delivery, risk reduction, cost reduction and cash flow management. At the same time, they create liquidity to fund acquisitions, product development, debt reduction, share buy-back programs and other strategic initiatives.
Is your organization using working capital management best practices to maximize cash flow?
Deep expertise in the processes that drive
effective working capital management
We help companies apply proven business best practices to transform the end-to-end processes that influence effective cash flow management:
Take the first step towards releasing more cash from your operations.
Enterprises that survive are those that generate enough cash to keep their operations running. Improving cash flow management starts with understanding gaps in each component of the cash conversion cycle.
To produce working capital improvements from accounts receivable, world-class companies look at the C2C process across multiple functions.
Assess and improve the health of your working capital and cash flow management practices
Our cash flow analysis carefully reviews all the processes that drive effective working capital management, as well as your strategy, policies, enabling technologies and training. Then, we apply our experience to help you implement business best practices for working capital management and adapt them for your unique business needs and culture.
Our analytical rigor, process expertise, collaborative approach and emphasis on embedding leading practices have helped many organizations deliver the cash flow improvements required to fund operations and enable growth. In fact, we have delivered successful working capital initiatives in more than 60 countries for Global 1000 enterprises.
Target and improve key working capital performance metrics
We use metrics such as these to assess the health of your working capital management practices, help you understand how your performance compares with peers and world-class organizations and facilitate continuous process improvement.
Cash Conversion Cycle (CCC)
Measures the amount of time each net input dollar is tied up in the buying, production, and sales process before it’s converted into cash through sales to customers (DSO + DIO – DPO).
Days Sales Outstanding (DSO)
Measures the level of outstanding sales at the end of a month expressed in terms of the number of days worth of sales still outstanding represented by the balance of the accounts.
Days Payables Outstanding (DPO)
Measures the level of outstanding payments at the end of a month expressed in terms of the number of day’s worth of payments still outstanding represented by the creditor balance.
Days Inventory Outstanding (DIO)
Measures how much inventory an organization has tied up across its supply chain or more simply – how long it takes to convert inventory into sales.
Net Working Capital Value
Measures the overall operational liquidity of a business, typically calculated as Current Assets (Accounts Receivable + Inventory) less Current Liabilities (Accounts Payable).
Net Working Capital as % of Sales
Measures the percentage of working capital required to support further sales. For example, a measurement of 20% means that for every €100 of sales generated, €20 working capital will be required.
Shareholder Value Add (SVA)
Measures a company’s worth to shareholders. The basic calculation is net operating profit after tax (NOPAT) minus the cost of capital from the issuance of debt and equity, based on the company’s weighted average cost of capital.
Return on Capital Employed (ROCE)
Measures the efficiency and profitability of a company’s capital investments. The measure is important as the ROCE ratio should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders’ earnings.
Take the First Step Toward Releasing More Cash From Your Operations
Contact us today for a complimentary cash flow analysis.