Revenue Growth and Cash Management. What is the Cash Gap? Collection Period Payables Period Inventory Days.

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Presentation transcript:

Revenue Growth and Cash Management

What is the Cash Gap? Collection Period Payables Period Inventory Days

Cash Gap Computation Days in inventory + collection period - days in payables Inventory management improves cash gap

Comparison to Competitors 122 days Days in Inventory 35 days Cash Gap: 88 days Payable days Days in Inventory 36 days Payable days Dollar General 64 days Cash Gap: 32 days Collection Period: 3 days Wal Mart

Sales Growth and Cash Gap Short gap allows high growth Long gap causes company to grow out of cash Margin and cash gap

Time Dollar Amounts Cash Gap and Margin Revenue Expense Cash Gap

Time Dollar Amounts Cash Gap and Margin Revenue Expense New Cash Gap Cash Shortage Old Cash Gap

Time Dollar Amounts Cash Gap and Margin Revenue Expense Old Cash Gap New Cash Gap Cash Surplus

Time Dollar Amounts Cash Gap and Margin Revenue Expense Slower Sales Growth Cash Gap Cash Surplus

Time Dollar Amounts Cash Gap and Margin Revenue Expense Lower Margin Cash Gap Cash Shortage Former Revenue

Cash Gap and Fluctuating Sales Sales Variation Size of Cash Gap Cash Flow Variability