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Financial Forecasting:The Tool You Should Be Using

Critical to Turnarounds and Completing Transactions



Here's a question for business owners and managers (and a question those who advise them should be asking their clients): Are you taking advantage of one of the most powerful - but underappreciated - management tools available to you?


We're talking about financial forecasts: yearly, monthly and even weekly projections of the revenues you expect to receive, the expenditures you plan to make, and the resulting net cash flow.


Why is it so important for you to prepare and use financial forecasts? First, of course, they help you do a better job of running your company. But they are also vitally important if you will be seeking additional capital from a lender or investor, or may want to sell your company.


Lenders, capital sources and acquirers will analyze the credibility of your financial projections to assess your management team's abilities to plan for the future They will also use those forecasts to help determine your company's value.


At KGI, we work with your company to build reliable, practical, easy-to-use financial models that can help you:

  1. Attract a new loan or new investors.

  2. Renew or restructure debt.

  3. Build stronger relations with your Board of Directors and shareholders.

  4. Make key strategic and operating decisions faster and better.

Here are a few examples of how KGI's reliable projections helped our clients:

  1. A retailer with over 125 locations used the forecasting tool to evaluate different options; as a result, it changed its business plan to a more efficient and smaller platform, and attracted new capital.

  2. A non-profit education organization examined the outcomes of various strategies with its forecasting tools, and selected an option that substantially reduced its fixed costs.

  3. A retailer used its forecast to negotiate a forbearance agreement with its lender and avoid litigation when the projections showed a better outcome compared to a bankruptcy filing; it was then able to complete a series of transactions.

  4. A consumer products company was able to recapitalize and restructure its debt once a reliable financial forecast showed this would yield much better results for creditors than forcing a premature sale at a significantly depressed valuation.

  5. A life sciences company negotiated a reduced purchase price for an acquisition target by developing a more credible financial forecast than the one the seller had initially prepared.

At KGI Turnaround and Financial Advisory, we assist middle market companies to turn around their financial performance and complete critical transactions. For over 30 years, our experienced professionals have worked alongside management teams to identify and implement improvements to profit and cash flow, build more effective leadership, and develop strategic plans.


We welcome your call so we can give you more information or discuss your situation in confidence.


Steve Green, Co-Founder & President: (310) 829-0255 ext. 220 sgreen@kginc.com


Gerry Seli, Managing Director: (310) 829-0255 ext. 258 gseli@kginc.com

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