Cash and capital for retail
How can Deloitte help you navigate?
1. Conserve cash!
Many companies have “lazy” business processes that miss opportunities to improve orders, collections, and consumption of working capital. Performance metrics that focus on cash flow are often missing from management goals and incentives. During a downturn, contracting demand causes most businesses to experience a combined cash and margin squeeze.
Some suggestions:
- Reduce order-to-delivery times to decrease risk and capital exposure.
- Examine all opportunities to improve cash flow. Look at inventory and payables for cash flow improvement opportunities.
- Explore tax opportunities to enhance cash flow, such as maximizing credits and incentives, reviewing accounting methods or examining procurement strategies.
2. Recognize opportunities
During periods of expansion and growth, asset values often peak at levels that defy economic analysis. Conversely, during contractions assets and resources can become available at fire-sale prices. This could be the time to buy undervalued assets when competitors are forced to dispose of them under their intrinsic value, thus leading to a secondary benefit of reduced property tax assessments.
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