Engagement Results

Industry:

Software consulting and professional services

Size:

$50 million

Expertise:

Cash Flow Forecasting

Assignment:

MainStream was engaged by a lending institution to analyze the cash flow projection capabilities of a micro-cap publicly traded company in the software consulting and professional services industry. A roll-up in the consulting industry, the client had been struggling in accurately projecting and meeting their cash flow forecasts.

Actions:

MainStream created a comprehensive cash flow model was created in order to evaluate the short-term viability of the enterprise and to determine whether the company’s cash projection modeling was effective. In addition, MainStream conducted an extensive historical analysis of the enterprise to determine long-term trending of the financial and economic indicators of company performance. The client’s short-term cash flow projections were then compared to the model created by MainStream in order to determine the accuracy of the client’s model.

Results:

MainStream utilized our 13 week cash flow program that provides both a review of prior cash forecasts as well as the development of forward looking projections. When the models were completed feedback was provided to the lender on the differences between the cash flow projections using the MainStream model and those of the company. MainStream also provided the company with the forecasts, discussed the differences and offered a series of suggestions on what and how to modify their cash flow forecasting processes to provide more consistent and accurate projections in the future.