Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Clara

100% Recommendation Rate

50 Meetings

12,183 Q&A Upvotes

USD 229 / Coaching

2

How to structure liquidity / turnaround case?

Hi, how would you structure this, and what do you think of this structure?

Situation / question: Client is hit from external effect, is bleeding cash, needs cash short-term, and also thinks that not all of his businesses are profitable anymore. How to turn the situation around (short- and mid-term)?

Possible structure:

Short-term: Liquidity / cash management

  • Investigate situation / objective
    • Info sources: BS, IS, CFS
    • Important KPIs: cash ratio, quick ratio, current ratio; Fin. CF, Op. CF, Inv. CF
    • How long to survive? How much additional CF is needed?
  • Generate cash (also structure regarding CFs possible, i.e. Fin. CF, Op. CF, Inv. CF)
    • Supplier, e.g. stop to pay
    • Customer, e.g. factoring
    • Employees, e.g. layoff
    • FIxed / current assets, e.g. de-invest
    • ...

Mid-term: Turnaround / restructuring

  • Investigate situation: analyze market, analyze strengths and weaknesses of company (value creators, value destroyers)
  • Restructure
    • Invest in value creators, de-invest in value destroyers
    • Restructure core-competencies and processes
    • Restructure organization and culture
  • Improve further: profit opportunities (revenue opportunities, cost opportunities)
  • Plan and implement

Hi, how would you structure this, and what do you think of this structure?

Situation / question: Client is hit from external effect, is bleeding cash, needs cash short-term, and also thinks that not all of his businesses are profitable anymore. How to turn the situation around (short- and mid-term)?

Possible structure:

Short-term: Liquidity / cash management

  • Investigate situation / objective
    • Info sources: BS, IS, CFS
    • Important KPIs: cash ratio, quick ratio, current ratio; Fin. CF, Op. CF, Inv. CF
    • How long to survive? How much additional CF is needed?
  • Generate cash (also structure regarding CFs possible, i.e. Fin. CF, Op. CF, Inv. CF)
    • Supplier, e.g. stop to pay
    • Customer, e.g. factoring
    • Employees, e.g. layoff
    • FIxed / current assets, e.g. de-invest
    • ...

Mid-term: Turnaround / restructuring

  • Investigate situation: analyze market, analyze strengths and weaknesses of company (value creators, value destroyers)
  • Restructure
    • Invest in value creators, de-invest in value destroyers
    • Restructure core-competencies and processes
    • Restructure organization and culture
  • Improve further: profit opportunities (revenue opportunities, cost opportunities)
  • Plan and implement

(edited)

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Clara

100% Recommendation Rate

50 Meetings

12,183 Q&A Upvotes

USD 229 / Coaching

Hello!

Overall I agree, particularly with the split in short term-medium term for the problem.

However, this would not appear like this as a case. If you see the Library of cases, you can find much more real ones -particularly the ones made by coaches-.

Hope it helps!

Best,

Clara

Hello!

Overall I agree, particularly with the split in short term-medium term for the problem.

However, this would not appear like this as a case. If you see the Library of cases, you can find much more real ones -particularly the ones made by coaches-.

Hope it helps!

Best,

Clara

Book a coaching with Ian

100% Recommendation Rate

188 Meetings

15,882 Q&A Upvotes

USD 289 / Coaching

Hi there,

This is a fantastic framework. Well laid out.

However, I would add a few things, particularly in the short term fixes segment:

  • Restructure debt (longer-term debt and/or lower interest rates)
  • Issue debt/equity (improve cashflow)...especially w/ current interest rate landscape
  • Reduce accounts receivable
  • Increase accounts payable

Overall, well done!

Hi there,

This is a fantastic framework. Well laid out.

However, I would add a few things, particularly in the short term fixes segment:

  • Restructure debt (longer-term debt and/or lower interest rates)
  • Issue debt/equity (improve cashflow)...especially w/ current interest rate landscape
  • Reduce accounts receivable
  • Increase accounts payable

Overall, well done!

Related case(s)

MBB Final Round Case - Smart Education

Solved 15.2k times
MBB Final Round Case - Smart Education Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvantaged areas. The client is considering starting operations for its services in the Chicago area. They hired us to understand if that makes sense. Due to the nonprofit regulation, SmartBridge should operate on its own in the market, without any partnership. How would you help our client?
4.6 5 525
| Rating: (4.6 / 5.0)

Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case

Struktur Management Partner Case: Automotive Turnaround während Corona

Solved 3.8k times
Struktur Management Partner Case: Automotive Turnaround während Corona Dein Klient ist ein spezialisierter Lösungsanbieter für komplexe Leichtbaugruppen aus Metall für die Automobil-, Luft- und Raumfahrtindustrie. Im vergangenen Jahr wurde erstmals ein negatives Betriebsergebnis erwirtschaftet. Die Geschäftsführung beauftragt Dich, ein realistisches Zielbild für Phoenix zu erstellen und dafür notwendige Maßnahmen zu definieren. Du reportest direkt an die Geschäftsführung:  Wie kann Phoenix gerettet werden?
4.0 5 40
| Rating: (4.0 / 5.0)

Dein Klient ist ein spezialisierter Lösungsanbieter für komplexe Leichtbaugruppen aus Metall für die Automobil-, Luft- und Raumfahrtindustrie. Im vergangenen Jahr wurde erstmals ein negatives Betriebsergebnis erwirtschaftet. Die Geschäftsführung beauftragt Dich, ein realistisches Zielbild für Phoen ... Open whole case

Deep Water Rescue

Solved 400+ times
Deep Water Rescue Deep water is a European manufacturer of small yachts and premium boats for private customers. The company operates in Europe and the Middle East and is based in Northern European country, where its manufacturing site, as well as HQ, are located. Deep Water has a strong and recognizable brand as a manufacturer of luxury boats and (recently) also small yachts. Deep water has been experiencing significant financial difficulties related to its profitability during the several past years. Currently, Deep Water has about 200 M€ of sales p.a. The company wants to improve its profitability, maintaining at least the current level of sales.
3.6 5 10
| Rating: (3.6 / 5.0)

Deep water is a European manufacturer of small yachts and premium boats for private customers. The company operates in Europe and the Middle East and is based in Northern European country, where its manufacturing site, as well as HQ, are located. Deep Water has a strong and recognizable brand as a m ... Open whole case

Bain 1st Round Case – BlissOttica

Solved 200+ times
Bain 1st Round Case – BlissOttica Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
4.2 5 13
| Rating: (4.2 / 5.0)

Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client? Open whole case