Does the management of your company understand the significance of positive cash flow and how to calculate the amount required to cover the company’s cash obligations?
Cash flow is the lifeblood of any company. It is critical for management to know the amount of cashflow that is needed to cover the company’s future cashflow needs. One of the scariest times in a business owner’s life is to know that bills are coming due and there is insufficient cash to pay them. This number can be mathematically determined with the help good financial assumptions, a good budget and good historical information. Wouldn’t you rather be a company that is not stressed out about not having enough cash to meet payroll or pay bills.
Does your company’s management understand the difference between a loan and working capital line of credit? Are the managers familiar with the effect each credit facility will have on cash flow and the process to determine which one the company needs? Maybe the company needs a combination of both.
Management should first determine the type of assets that it needs to finance. (fixed assets or current assets. If the assets will have a useful life of three years or more than a term a loan would be a better choice. On the other hand, if the assets are receivables or inventory, with a useful life of twelve months, then a working capital line of credit would be a better choice. It is almost impossible to pay for a bulldozer in twelve months. We at Evans Business Advisory Service, Inc. can work with your company to help you make a sound decision about the correct credit facility.
What type of companies do we work with?
While our target market is companies that have been in operations for five years or more, with five to 10 employees and revenues of $500,000 – $5,000,000.00, we have previously worked with a company listed on the New York stock exchange. Occasionally we work with companies that are less than three years old to review their business plans. Our company is not industry specific. I encourage you review the company’s web-site to get more information on the services the company provides. After reviewing the website, contact us jbevans@evansadvisory.com or call 281788-8739.
Should the company buy or lease equipment?
Each method of financing has its advantages and disadvantages. Management should always consider the tax implication of each method. In addition, management should consider the technology of the fixed asset. If the technology of the asset is basically the same as it was back in 1970, and research shows that that there are no drastic changes in planed, it is probably a good decision to buy the equipment. If on the other hand the technology changes every year, and if there is a maintenance contract offered with the equipment, then a lease maybe a better choice. If your company needs help in determining the best option, contact us jbevans@advisory.com or call 281-788-8739.
Why do companies hire management consultants?
Many times, companies want an experienced business executive (another set of eyes) to review and analyze a business issue and produce a set of written alternatives to resolve the business issue. If your company needs the benefits that an experienced business executive can provide, contact us jbevans@evansadvisory.con or call 281788-8739.
The company may have the management expertise on staff to review, analyze and resolve a business issue but a special project would take this talent away from their normal responsibilities. Does your company have a special project that would take your talent away from their primary responsibilities? I suggest you call Evans Business Advisory Service at 281-788-8739 or send an e-mail to jbevans@evansadvisory.com.
Does the monthly review and comparison of the company’s financial statements (balance sheet, profit & loss, and cash flow statement) include ratio analysis and comparison to the industry standards?
Management should review the company’s financial statements every month. The review should include a comparison analysis to the previous month. And a comparison at the end of each quarter to the previous quarter. In addition, a ratio analysis should be completed. If your company values an interpretation of the ratio analysis and comparison to the industry standards, please contact Evans Business Advisory at 281-788-8739 or email jbevans@evansadvisory.com.
