Management Assessment, Projected Cash Flow, and the First Way Out
Q: Is there a particular software program that you recommend to run projections?
A: There is no specific software program we recommend. The programs can range considerably in price and support.
It is customary to experiment with a specific software program on a trial basis, usually lasting one month. A key feature to look for is the focus of the projections input. If the focus is on the likely values for the Business Drivers, i.e., sales growth, gross margin, SG&A%, Owner Payout Rate, Accounts Receivable Days, Inventory Days, Accounts Payable Days, and Fixed Asset Spending – or something relatively close – that is an encouraging sign. But if the focus is on each line item in the income statement and balance sheet, that usually results in a totally unworkable projection process.
As a matter of information only, Moody's Risk Analytics and Baker Hill are two fairly widely used software programs.
Course overview: Management Assessment, Projected Cash Flow, and the First Way Out