Chessboard Group has experience supporting businesses to make strategic decisions, supported by robust financial analysis & forecasting. Our financial models are designed to provide operational insights, assist with business planning and strategy.
Scenario
Client was an importer & wholesaler of solar panels and related equipment. The business was experiencing significant growth and needed to refinance its trade finance facilities & understand its capital requirements going forward under a multiple different growth options being considered.
Brief
The client required a forecast model which could be provided to its bank to support an application for increase in its trade finance facilities.
The model was to be constructed down to a monthly basis and allow for expansion of new warehouses around Australia.
A key component was to allow for sensitivity analysis for order lead-times from manufacturers, stock on hand and terms for payment of suppliers & receipts from customers.
Solution
A financial model was constructed forecasting the businesses on both a geographic basis and by key SKUs. Different margins and inventory lead times were used for each SKU.
As the business had a few different growth options, including a potential acquisition, forecasts allowed for scenario analysis.
The final model allowed for users to stress test the outputs under a range of scenarios to understand the effect changes in economic conditions and freight timing had on margins & covenant compliance. The outputs from the model were used by the bank to assess both the facility limit requirements, as well as the tenor to ensure there was enough buffer during key ordering periods.
Given the monthly periodicity, the model was constructed in a way to allow for it to be rolled-forward each month as new “actuals” were available to be added.