Capital Management

Balance sheet management is a key function of management. Many businesses, however, virtually ignore the balance sheet and concentrate on earnings. This can result in inefficient allocation of capital and increased financial risk. An effective balance sheet management program requires highly disciplined planning, measurement, and communications across various financial staffs. A good asset liability management program will enable management to restructure the balance sheet so that it is most beneficial to the company.

Working capital management is converting operating assets such as accounts receivable and inventory into cash inflow and operating liabilities such as accounts payable into cash outflow in a way that is most beneficial for the company. Effectively managing working capital can increase cash flow, decrease interest expense, increase profits, eliminate debt, reduce the company business risk, and strengthen the overall balance sheet. An efficiently administered balance sheet and working capital management program will ensure management that the assets and liabilities of the company are being utilized to their maximum potential.

  • Does your organization prepare operating and cash flow budgets?
  • Does your organization forecast cash flow daily, weekly, monthly and annually?
  • Does your organization compare the budgets and forecast against the actual results?
  • Does your organization have a formal plan identifying weaknesses in operations and mechanisms in place for the quick execution of a correction plan?
  • Are you applying the best practices in managing working capital?
  • Does your organization define the business strategy, identify the critical success factors, identify and establish key performance indicator benchmarks for thoses success factors?

If you answered no to any of the above questions, or you are unsure about your cash and liquidity management programs, Alan Neal & Associates is positioned to assist you. To learn more about how our value-added services can provide value to your organization, contact:

Alan Neal & Associates, Inc.
240 Forest Avenue Suite 202
Chattanooga, Tennessee 37405
Phone: (423) 756-4076
Fax: (423) 756-4085

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