The client was beginning the process of building out a manufacturing facility and wanted to explore partially financing the buildout using venture debt. In order to do so, they needed a more sophisticated and versatile corporate financial model and five-year forecast to determine how much debt the business could support.
However, the existing model was static and incapable of running different scenarios without extensive manual adjustments.
I worked with the COO/Co-Founder to develop various scenarios around key revenue drivers and financing options and to establish base, high and low cases that could be run through the dynamic financial model simply by changing the value of a single cell.
This model allowed the founders to see the company’s “path to profitability” in future years as well as the cash burn required to achieve profitability under multiple operational and financing scenarios. (Learn more about this type of analysis: Scenario Analysis and Sensitivity Analysis in Financial Forecasting.)
The model is also being used as the basis for all financial projections required as part of the due diligence process associated with financing the new manufacturing facility.
To learn more about forecasting, you can also read our article on dynamic cash-flow forecasting on CFO.com.
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Mike has over 10 years of experience in roles requiring expertise in strategic planning, forecasting, budgeting, business valuation, financial modeling and both buy-side and sell-side M&A transaction support. He served as a Sr. Analyst at Elements Behavioral Health where his responsibilities included leading the budgeting and forecasting processes as well as acquisition transaction support. Additionally, he served as a Sr. Associate in the Private Capital group at Union Bank where he focused on executing middle market acquisition opportunities across various sectors. Mike holds an MBA from the Graziadio School at Pepperdine University, a B.A. in Economics from Brock University and is a CFA Charter holder.