WellCapital can help – we design, develop and implement short-term (14 week) and long-term (2 – 10 years) cashflow models with predictive capability which can be structured using the cashflow and budget hierarchies.
This cashflow hierarchy makes provision for multiple levels of consolidation based on currency, country, legal entity, business divisions, markets and products for the purpose of analyses and performance assessment.
The cashflow models identify and separate the underlying business model elements from capital and funding activities to highlight financial sustainability performance as well as inappropriate funding structures and costs.
The cash related items within the total organisation (not only treasury) are included the impact of working capital elements on the cash and liquidity position is also reflected as well as the performance quality of working capital management.
It incorporates all aspects of liquidity including non-cash working capital to ensure cash management is not done on a silo basis and reveals cash trapped in debtors and inventory. It provides valuable information on the behaviour of creditors and debtors. Working Capital as the most efficient source of funding in any organisation can truly be exploited with this tool.
The models provide information indicating short term cyclical patterns and short-term cash surpluses or requirements to allow management to take the necessary actions in delaying, expediting or financing the outcome. The detail in the various structures defined by the organisation allow management to drill down to the events causing the undesired results. The effect of action plans can therefore both be monitored on a short-term as well as long-term basis.
The models can be implemented as a pure strategic tool for determining funding requirements or performing viability assessment, or it can be implemented as an operational cash management tool which elevates into a strategic tool. The value increases exponentially when it is incorporated into the cash management and budget monitoring and evaluation processes of the organisation. The value of this tool is both operational and strategic in understanding and addressing the future implications of today’s decisions with its ability to assess the financial viability and sustainability of new acquisitions, disposals, strategies, products. This is a highly practical everyday use tool for business units and the treasury function.
The variance analyses, between forecast and actual results, supports management decisions and plans as well as providing institutional knowledge and intelligence by improving accuracy of forecasts.
Information and metrics are necessary to satisfy both operational and decision-making capability. Typical infograms which contain short-term cash flow forecasting and long-term funding plans are developed.
Where treasury performs the role on in-house banker, support is provided to ensure appropriate intercompany funding agreements, terms and conditions and the restructuring of the existing intercompany funding flows.
Existing general banking facilities, bank accounts and the use of bank cash management systems are addressed to ensure an optimal and practical solution in the availability and cost of cash.
WellCapital provides corporate finance advisory solutions with the focus on business valuations, financial performance evaluations and due diligence assessments. We act as lead or change-agent in business turnaround and interventions which can result in new or amended busines models, capital structures, mergers, acquisitions, disposals, business processes and forensic investigations.
WellCapital provides treasury advisory solutions with the focus on the various financial risk portfolios (liquidity risk, foreign exchange risk, commodity risk) arising as exposures from the underlying business models in order to develop appropriate risk management policies and strategies with performance metrics. The reconciliation of these performance metrics with the treasury accounting results is undertaken to provide both operational and strategic understanding.
The liquidity risk management includes:
- short-term and long-term cashflow forecasting using predictive modelling to identify the funding requirements and facilitate the operational and strategic decision making
- mapping of all bank accounts and optimisation of banking and lending facilities
- restructuring and refinancing of asset and liability portfolios
- interest rate risk and credit risk management
- obtaining credit rating and debt issues
- optimisation of working capital management
- alignment of cashflow forecasting with operational budgets and variance reporting based on actual cashflows
- development of local and global cashflow pooling
- implementation of intercompany financial support and transactions
- obtaining the necessary regulatory approvals to ensure compliance and control
- the treasury functions and responsibilities within the organisation should have the correct structures and systems to realise the potential positive strategic impact and value added.
WellCapital provides expert and independent advisory services to Board committees and within legal proceedings.
WellCapital prides itself in providing value‐added solutions and services to a wide variety of clients and markets which transcends industry and size and offer the services in a variety of ways to accommodate the requirements and priorities of our clients
15 Pulipit Street, Southdowns
+27 83 556 2466
dries.ferreira@wellcapital.co.za