13-week model for distressed firms

Analyst 1 in Other

Not sure if this is the right place for this, but are there any places where I can find a 13-weel cash flow model and learn more about distressed/restructuring modeling?

I know that WSP has a modeling course (~$400), but are there any free resources.

Comments (9)

Most Helpful
Mar 25, 2020

Anything out there in the public domain is pretty basic and not all that useful. I'm not sure the purpose you are using one for, but nothing I have seen in the public domain will be taken seriously by a bank, mezz fund or PE investor if the Company really had liquidity concerns. For companies under 25M in revenue, one location, one business line, very simple, they may be useful.

13 week cash flows are typically high customized to a company's cash conversion cycle and business model at a specific point in time. I doubt anyone would share a detailed developed model due to all the confidential information contained in one. Also they very significantly by industry, an auto manufacturer vs construction company versus a professional services firm.

I work at a restructuring firm, we have some high level template slides for presentation purposes that don't change a ton, but the bones of everyone vary significantly because they are built on the outputs of client systems (AR, AP, backlog, accruals) and client schedules (sales forecast, etc). Its difficult to template those components.

In addition, every borrowing base is calculated differently. distressed client typically under these, but this is not included on everyone.

    • 4
  • Prospect in Other
Mar 25, 2020

What is the best way to prepare for restructuring interviews at places like PJT, Evercore, Moelis etc?

  • Associate 2 in CorpDev
Mar 27, 2020

Thanks mate - Would it be possible to highlight which line items should be focused on or which are most volatile across the 13 week period though? I imagine after doing a few of these deals you'll start noticing recurring themes

Apr 2, 2020

Cash receipts can be difficult to model for certain clients, be sure to look at customer actual payment history. Forecasting timing leakage (if applicable) or accretion on A/R can be tough. (get the bank collateral audit for a quick cheat on accretion, so you don't have to do it yourself, or can at least roll it from when it was done) If your using a backlog to forecast sales and cash receipts after the AR burns off, have a conversation with the operational people. the people involved in inputting in the data usually do it based on when the client request the work to be performed, or desired dates of shipment, but not necessarily when the client plans to manufacture or deliver.

On the disbursement side, judging the timing of payments and how much "stretch" you can put into the numbers (assuming this is a distressed company) can be very subjective.

Forecasting Capex is extremely difficult at any client where this is an issue.

Forecasting cash disbursements for employee turnover with stock options in the money is nearly impossible, if any key person leaves, which they will never tell you until they do, who holds significant in the money options can be a problem. For private companies who have the valuation done once a year based on the prior year financials, there can be substantial payouts, even though the company is currently in a liquidity crisis.

Overall, you need to verify information well beyond the accounting/finance department and get to the operational people. Understanding staffing if that flexes significantly during seasonal companies or the affect of layoffs and severance can be material.

These forecast are usually only directionally correct.

    • 3
Mar 25, 2020

Send me an email and I'll send you the one that's published in my book on the subject. [email protected]

    • 2
Mar 27, 2020

His book his really good. Definitely take him up on the offer; I forced everyone at our firm to buy a copy lol.

Apr 2, 2020

Is it OK if I reach out to you as well? Would appreciate.

Apr 2, 2020

Yes, I've probably shared about a dozen times already.

  • Prospect in IB - Ind
Mar 26, 2020
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