Focus: short-term debt sustainability
How to reconcile the Central Credit Register and the Trial Balance
After having analyzed the composition of Working Capital and having shared methods to evaluate its sustainability and quantify the resulting needs, we will focus with Cristian Fusili on the activity of choosing possible financing sources.
This evaluation, which starts from the needs indicated in the planning phase, will have to take into account some key factors including:
- company situation at the Risk Center level, level of use of short-term lines and realistically available credit lines;
- sustainability of new lines to support working capital needs;
- flexibility and costs of the financial instruments chosen.
Following the analysis, the reconciliation between the banking exposure present in the Risk Center with that resulting from the balance sheet will also be carried out, using a real example.
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How to verify the sustainability of working capital
Il Working Capital it represents the short-term uses of the company and like all investments requires adequate financial coverage! Small detail: it is an investment that changes over time influenced by factors that we are not always able to control such as: invoice collection times, fluctuations in raw material costs, unexpected customer defaults.
It therefore becomes essential to check whether the financing sources are available they will be able to "handle" any extra financial needs of Working Capital. How? Obviously by realistically stressing the budget. How many days of delays in payments from customers are we able to tolerate with current liquidity and agreements? What will be the maximum short-term requirement over the next 12 months? Is it sustainable? We will answer this and other practical questions during the webinar, using the analysis of real cases.
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