04

CASE STUDY

A financial model that optimizes profits and cash flows.

Challenge

A group of pharmacies were eager to invest in a new business opportunity, but the financial unknowns were daunting: How could they reduce these unknowns and determine if the venture was a smart investment? How could they accurately forecast future cash flows and profitability, while also accounting for the unexpected?

Solution

Understanding the transaction and revenue generation process was key in evaluating profitability and cash flow. We worked closely with the client to ensure they fully understood their customer’s buying journey from beginning to end and analyzed conversion rates for each step. From there, we built a custom model and performed analysis of 341 unique scenarios to test each step’s impact on profitability (EBIDTDA), burn rates and acquisition costs. The measures helped determine which paths were most profitable, which optimized cash flow and identified those to avoid.

Outcome

After completing our analysis, the company ultimately saw a need for many changes before pursuing the venture further. By testing each of their ideas before they undertook the initiative, we saved them tens of thousands of dollars and hundreds of working hours.

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