Cash management
Increasing options and buying time
When working in a distressed company, time and cash are the
most important and scarce commodities.
If both of these were in plentiful supply there is no doubt that
most companies would eventually manage to solve their problems
– be it at a price – or they simply would not have a
problem to solve.
But given we live in the real world and do not have access to
either a money tree or a time machine, time and cash are major
constraints when turning around distressed businesses.
A common mistake is to accept cash and time as fixed variables
in a turnaround – then embark on a balance sheet and/or
operational restructure within the confines of these. For example,
"we only have $X and four weeks to decide on whether we sell,
save, or close down a division or facility".
