T.M.Lewin

Integrated Cashflow Analysis & Reporting Tool

Developing an integrated financial model to address the challenging operational and strategic questions faced by the British menswear retailer.

Robust & accurate

Short and medium term forecasts are much improved with increased confidence in output KPIs

Improved cash visibility

Working capital was a key challenge in a business with lumpy supplier payment and procurement activities

User friendly

The model was easily taken on and operated as intended by three different team members

Challenge

T.M.Lewin’s existing model and analysis had not evolved with the changing needs of the organisation, so they required a model that supported both the strategic planning needs of the business as well as shorter to medium term forecasting of the impact of stock and sales performance on the cashflow. The granularity of certain elements of the forecast (especially stock & working capital) needed to be tracked on a weekly basis, and they also wanted high level what-if analysis to address an increasingly more complex retail environment via multiple distribution channels.

Solution

We worked closely with CFO Marc Lombardo and his team to develop a solution that integrated with source systems while providing a suitable level of granularity to develop a robust forecast. Our solution incorporated the 4-4-5 + catch-up week peculiarities of the retail sector and addressed the more immediate need for more granular weekly forecasts of elements driving stock and working capital. It also supported the team’s short to medium term working capital management activities and their ability to deliver the information required by other stakeholders.

Results

The new model has been in place since 2017 and has been a cornerstone in the company’s planning and cash-management. It has supported the business in its reporting to and negotiations with lenders, and supported debt capacity analysis and covenant testing, along with rigorous business performance stress testing, which is critical in a fast-paced retail environment.

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