Forecasting

With help from the Hinge Analytics team, our client developed an advanced capital allocation planning tool to better predict and manage cash flow priorities and working capital through a period of unprecedented growth.

Background

Established in 2012, our client is a burgeoning American brand of luxury fashion accessories. The Company currently sells online, but plans to open up a limited number of showrooms in the United States. By designing its products in-house and selling directly to consumers, the Company lowers the costs of its products.

Project

Following initial diligence on the Company's history and its planned growth phase, the Hinge team conducted an in-depth audit of the Company's historical cash flow needs. The Hinge team then developed a custom financial projections model with unique features to help the Company manage its working capital through the projection period. A custom real-time dashboard was included, which allowed the Company to appropriately plan for working capital swings and to tackle issues in advance of any potential cash shortages due to high growth.

Client

Luxury Fashion Accessories Designer • Small, Private Company

Goals

  • Understand cash flow needs of growing business
  • Develop a tool to manage capital allocation priorities
  • Track, manage and increase cash flow and working capital efficiency

Approach

  • Initial diligence phase to understand client history and growth plan
  • Conducted in-depth audit of historical cash flow needs
  • Designed easy-to-use, integrated projection model to forecast cash flow and working capital needs
  • Custom real-time scenario analysis tool to limit risk exposure

Results

  • Forecast resulted in conclusion that outside capital injection would be required to fund growth
  • Working capital efficiency increased by over 20%

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