IRCG Publishes Free Cash Flow Modeling Spreadsheet for Distributors
The tool has been put together as a resource for distributors who have not developed the projection tools that will allow them to act early as events unfold related to the current COVID-19 global health crisis. Distributors that wait until cost-reduction and other actions are upon them will have to cut deeper and more drastically than if they devised strategies with triggers in advance.
Access the cash flow modeling spreadsheet for distributors:
Use the tool to run at least three scenarios:
- Optimistic: Ideal case in terms of both duration and decrease in revenues
- Realistic: Between optimistic and pessimistic
- Pessimistic: Slightly worse than the worst you expect
The sooner you can identify which scenario is likely to play out, the less drastic adjustments will be. This is the main point of the tool, to identify the actions you will take under these various circumstances.
You will notice that cash will generally grow as sales decline. Because cash is increasing during the downturn, it often goes unnoticed that total working capital is decreasing. In fact, “it’s not the fall that kills you – it’s the stopping.” More businesses are likely to collapse in the upturn than the downturn.
We have chosen to put this spreadsheet in the public domain to support our industry. We encourage distributors to contact us with questions or discuss strategies as we endure this tragic pandemic. Reach out to me at firstname.lastname@example.org or give us a call at