Operational cash flow is the lifeblood of the business. Many companies don’t fully understand where all of the cash is going, nor do they measure and monitor their cash beyond looking at their bank balance. Many companies don’t make the distinction between profitability and cash flow. They keep wondering why they don’t have any cash when the income statement says the company is profitable. Many companies don’t look at the three basic financial statements – Income Statement, Balance Sheet, and Statement of Cash Flows – nor do they understand how they are developed and what they mean. Most companies don’t prepare a cash forecast which would allow them to anticipate their future cash requirements.
It is essential that companies understand their current cash position, historical cash activity and trends, and develop a cash forecast for the future. Companies need to understand the difference between cash needed to run the operations, as compared to cash available for capital or other investments. Do you?
pricing is reduced, or your vendors raise their prices?
These are typical questions that business owners and managers encounter daily. Can you answer them?
What JP-MC Can Offer to You
Our experience analyzing companies down to their core elements can help build up the cash flow trends for your operation. We partner with management to develop realistic assumptions for the current and future performance of the business, in order to create a realistic cash forecast and spending plan. We assist with the development of quotations and pricing models, and negotiate with vendors for the most favorable prices and terms. We develop cash flow models and forecasts that will help management understand the impact of cash and the financial decisions they are making each day.
Our Successes – Associates of JP-MC
As part of our general management responsibilities as well as our acquisition due diligence, we have analyzed the cash flow of many companies and operations, and shown management in many instances where the true cash position of the operations differed from their perception. We have developed cash improvement programs which have included complete vendor analysis and management action plans; activity based costing and cash flow models to understand which areas of a business / operations were contributing cash versus hemorrhaging cash; and created product and customer cash generation models to determine where cash was being made or lost so that the customer base and operations could be optimized.
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