This family-owned home appliance trading company has experienced significant growth due to a changed sales strategy and growth in its online proposition. The company has sales of around €25m in household appliances such as air conditioners, fans and kitchen appliances, whose product sourcing was done almost entirely in China. Due to the disruption in this chain (including price increases and extended lead times) and the limited ability to pass on increased prices to its customers, the organisation’s returns declined. The seasonality of its products created peak moments in inventory and accounts receivable accumulation. The organisation’s relative unfamiliarity with asset-based financing created unexpected shortfalls on its credit facility. The company wanted to improve its financial forecasting model in order to better fulfil its asset-based facility.
Solution:
Beaufort assisted the company by composing a financial model based on input from the company’s administrative systems as well as third party suppliers and implementing proper calculations of balance sheet and cash flows. Based on the improved financial modelling the bank continued their asset based financing facility.
