Available Cash: What’s Your Available Cash? An important, overlooked FINANCIAL KPI (Key Performance Indicator) Available Cash? I recently got asked by a CFO a question, I thought worth sharing. “How much cash should we maintain on our balance sheet in our business’? I believe its good for companies to have ‘available cash’ of a minimum of two months of operating expenses but ideally up to six months. Here’s a look at that formula and why’s its important. The formula for calculating “Available Cash” is as follows: Available Cash = (Cash + additional borrowing capacity) / Monthly operating expenses Defined as: […]
Category: Business Advisory
Leveraged Buyout Single Buyer – Get Quality Financial Projections!
Leveraged Buyout Single Buyer – Management Buyout Consulting Leveraged Buyout Single Buyer: Provide Multi-Year Financial Projections: Owners of growing companies often get approached by prospective buyers, even when they are not looking to sell. Suddenly, they are faced with a leveraged buyout from a single buyer. But owners that engage in those discussions, often face a challenge as the talks intensify. The challenge is they are talking to a single potential buyer, so they can’t use competition (i.e. interest from multiple bidders) as a way to drive up the Company’s price during negotiation. One way to create leverage in those situations […]
How Do You and Your Team Use Corporate Financial Planning?
Corporate Financial Planning: How Do You and Your Team Use Corporate Financial Planning? Do you have a financial planning process that improves your business planning process? There are numerous ways to apply corporate financial planning to drive more growth and value in your business. If you want help or ideas about that, give us a call. We’d be happy to share with you some effective planning techniques and/or help you implement them. Corporate Financial Planning Management Buyouts Lantern Capital Advisors helps growing companies find the financing solutions to fund management buyouts while keeping management in control and preserve and/or […]
Rent The Runway: Disrupting The Business Model
I have to admit, I am a pretty dress type of woman. I love watching the red carpet more than the awards show, and I would rather invest in quality than quantity. I know that when I plunk down my American Express for the once in a lifetime dress, it’s really just for that occasion, although I readily acknowledge that the chance for me to wear the eggplant Badgley Mischka gown is slim to none outside of the Mardi Gras Ball that I am purchasing it specifically to wear. And, I felt that I “saved” money, even though spending $795 […]
Did Borders Not Explore The Future?
I hate to tell you, “I Told you so.” But I told you so. Today’s Headline Breaking News: “Borders Bankruptcy Filing Expected as early as Monday or Tuesday. Borders Plans To Close about 200 stores.” “Movement in a new direction helps you find new cheese.” Everyone else was heading in that direction, if you can’t develop the app for that, then the mice will go elsewhere. Even the Catholic Church this week developed an “App for Confessions!”, although the Vatican announced today that they aren’t completely okay with that. I wonder if anyone in their strategy session dreamed about a […]
The Best CFO I worked with was a controller
A recent CFO.com article* (see link below) stated that because of the credit crisis, there will be a new breed of CFO. This new breed will be one heavy with capital markets experience. I believe that predication will turn out to be as much of an overreaction as the credit crunch is right now. Titles don’t matter. In private companies senior finance people may be called CFO, VP of Finance, Controller or even COO or President. The core job function of CFOs of private companies including rapidly growing ones (“Gazelles”) is about 90% internally focused (operations, financial reporting, dealing with […]