13 Week Cash Flow - How to do it?

red08's picture
Rank: Senior Monkey | 93

Hey Everyone,

I'm interested in learning about the 13-Week Cash Flow model that is used in turnaround/distressed situations. Does anyone have any good resources? I'm going to be interviewing for a role in our distressed group and I'm going to have to model it out. Would appreciate your help/advice.


Comments (12)

Dec 29, 2008

Distressed debt analysis: strategies for speculative investors

Dec 29, 2008

...in restructuring. It needs to match clients' less granular projections, which can be a SOB.

Dec 30, 2008

The best thing to do is try and model out a scenario yourself and think each step through. When preparing for Ch. 11, a company will surely owe plenty of money to all kinds of creditors, not just banks. When you build your projections you are assuming that all accrued debt is wiped clean(for now) and you are starting with a clean slate.

When you make your projections make sure every creditor is paid current from the petition date, even bank interest. What you are going to see is negative cash flow.

From there you want to calculate Debtor in Possesion (DIP) financing - basically how much you will need to stay afloat for the 13 week period, equal to your cumulative cash deficit.

Your cash balance each week should be exactly zero (or some minimum cash balance that you set).

Make sure you can input separate rates for the current bank debt, other accruals, and DIP financing.

If you do this and read up on Ch.11 cases, you should be fine.

Dec 30, 2008

Thanks for the responses and advice. I'll take a crack at the model as described and see what happens...

Apr 20, 2009

Thanks for sharing this post! The impact of global financial crisis brought numbers of bills, debts and bailouts to people and many investment companies. We dive so far into the world of debt that it becomes overwhelming, unmanageable, and plain out stressful. Believe it or not, if your debt has reached this point, you are not alone. One solution to this is debt consolidation. It is for when you have too many bills and the payments on your personal loans and other debts are getting to be too much. Debt consolidation brings all of these bills under one payment umbrella, and lowers the interest rate, and therefore payments. If you feel like you're drowning, and you have too many bills, then looking into debt consolidation is a far better choice than struggling paycheck to paycheck and worrying about short term loans to fill the gaps.

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Aug 7, 2014

Because 13 weeks equal 3 months (52 weeks / 4) and you cant really forecast accurately much longer? Just a guess....

Aug 7, 2014

I don't know if you're asking for anything specific, but 13 weeks equals 3 months equals 1 quarter equals .25 fiscal year. You can forecast beyond that or less than that, doesn't mean it's more or less precise.

Aug 7, 2014

Yeah thanks I guess makes pretty much sense..

Aug 7, 2014