A growing real estate company experienced choppy growth with wide fluctuations in financial performance over time. Planning was very difficult and wild swings in cash flow limited growth and caused great strain on the CEO.
Through a detailed analysis of historical financial information, a revised financial presentation was developed with clear representations of the performance of each line of business. This allowed Fintrepid and the Company to assess ROI of future investment and growth accordingly. Management determined that one of the lines of business proved to be far less profitable than expected.
Due to deeper analysis of company holdings, it became apparent that the company was further constricted by high leverage and cash tied up in assets. The recommendation was to sell multiple assets, free up cash flow, and pay down debt. This provided greater operating freedom for the business as a whole. Furthermore, an ongoing review of short term and long-term holdings is taking place.
By implementing these new strategies, cash flow as a percentage of income increased by 28%. Additionally, the return on the portfolio investments increased by 37%. Those are the tangible results, but intangible improvement also included stress being alleviated from management, time being freed up for management to focus/invest on more profitable lines of business, and the company being positioned to invest in more favorable ventures as they presented themselves.GROW BOLDLY fintrepidsolutions.com
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