YOUR COMPANY IS LOOKING FOR CASH FLOW FINANCING
ASSISTANCE!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Is Cash Management in your business in control... of you? , or are you in fact managing with a working capital formula and solutions that work. When it comes to business cash flow it's not a time for inaction or procrastination. Let's dig in.
DOES THE TEXTBOOK DEFINITION OF WORKING CAPITAL FORMULAS HELP YOU OUT?
How to calculate working capital needs - we get that one a lot at 7 Park Avenue Financial. The irony has never been lost on us when it comes to what 'academics' might say about how great your liquidity position is, given the way accountants, textbooks, and even bankers measure net working capital. It all starts when you're told you have a ' high' working capital (current asset to current liability ratio). A good look at your ' Statement Of Cash Flows ' as a part of your financial statements will identify your sources and uses of funds.
ASSET TURNOVER IS KEY TO REDUCING BUILD-UP OF ACCOUNTS RECEIVABLE AND INVENTORY
Naturally, you want to be in a position where your liabilities are low but does having high levels of receivables and inventory create a winning scenario? We sure don't think it does, because all that might mean is that you're mismanaging or perhaps simply unaware of the quality of asset turnover in A/R and inventory.
3 CRITICAL SIGNS OF INVENTORY PROBLEMS
Using inventory specifically, your warning signs might be as follows:
Sales are down and inventories are building up - Not good!
Inventory is outdated and somewhat unsalable - Not good!
Inventories are building up - Not good
And then there is your receivables position. Your A/R is of course your most liquid asset next to cash itself; in essence the heart of your liquidity.
3 KEY SIGNS OF POTENTIAL A/R PROBLEMS THAT AFFECT WORKING CAPITAL AND CASH FLOW
Here are your potential problem warning signs leading to negative working capital :
Customers are paying you more slowly relative to your terms of payment - Not good!
Potential bad debts loom on the horizon based on serious delinquency in your A/R
SOLUTIONS IN CANADIAN BUSINESS FINANCING FOR CASH FLOW
If your business has the right levels of current assets solutions to a working capital might be more abundant than you think. These are some great ways to finance the balance sheet for short term liquidity while bringing no long-term debt to your business. Short term financial health is all about monetizing current assets converted into cash and is a measure of a company's success. Those day to day operating activities are all about company liquidity giving our firm enough cash as short term obligations come due.
They include:
Selling receivables (A/R Financing)
Inventory finance
Canadian commercial bank lines of credit
Asset-based (‘ABL ‘) lines of credit that are non-bank in nature and monetize all your current assets - plus your equipment!
Tax credit monetization, i.e. financing your SR&ED claims
Working Capital term loans
Supply Chain / P O Finance
IT'S ALL ABOUT TIMING
In utilizing any of the above solutions it’s all about timing. Here's where you need skill and attention to details such as timing your payment inflows, managing payable and term loan commitments and of course keeping costs in line. Even managing account payables / short term obligations properly helps you to achieve your working capital goal.
DIFFERENT INDUSTRIES HAVE DIFFERENT CASH FLOW NEEDS
Unfortunately, some businesses have it easier than others. Service businesses that require low investments in capital and little or no inventory are often cash flow ' winners'. Tech businesses with high margins and low capital investment also can be cash-flow machines.
CONCLUSION
If you're not in the above industries as an example you're going to have to master a solid working capital formula. That's simply because you need cash to run operations, buy assets, and finance working capital in A/R and inventories. Your ability to manage and exhibit good cash flow management will affect the type and quality and rate and financing structures available.
If you need help in winning the cash flow battle when it comes to the management of assets seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a winning finance solution and working capital formula .
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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