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)?
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)
- 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