4. Profitability
Analysis
Cutting The Right Expenses
Perform A Spend Analysis Exercise
Use Independent Consultants To Double Check
Review your Internal Resources
01
02
03
04
5. The Process
Collect the Data and conduct qualitative Interviews
Talk to the CXO’s
Ensure that you have all the data, check for misreported data
and go with 80/20 (look for root cause cash flows which have
large impact)
Ensure Data is scrubbed and there is a standard unit of
measure
01
02
03
04
6. The
Details
Look at expense trends
Spend creep
Biggest Categories Of Expenses
Look For One off expenses
Review Operating Costs & Ratios
Analyze
Categorize
Fixed Costs Vs Variable Costs
Benchmarking Vs. Comparables using ratios
Liquidity , Debt and cash flow
7. Spend
Analysis
Look At Addressable
spending
Look at spending which is
not
addressable(eg. Regulatory
Expenses)
Review executive
compensation, stock, and
explore furloughs /layoffs
Review Raw inputs costs
Focus on what’s possible
8. Prioritize
& Organize
A great way to make a major
reduction in your stress is
to learn how to handle
financial issues by
prioritizing and organizing.
9. Vendor Management
Contracts To Exit /
Contracts With Buyout
Clauses
Review Contracts
•Identification (heavy equipment, office
equipment, SW, Inventories, Physical
facility, other Misc.)
•Redeployment and re-purposing
•Disposition and divestiture
Explore Asset Recovery Review Labor Costs Reverse Auctions
•Office Costs
Review Overhead Costs
•Equity based models
•Outsourced Labor
•Managing compensating models
including overtime and benefits
•Layoffs
Learn to prioritize and organize
123
Rank, Score and Prioritize
Vendors using Cost, Consistency,
Speed, Payment Terms & Quality
Service Levels
BATNA (Best alternative to a
negotiated agreement)
10. Summary
Take a look at the overall situation and plan worst case
Plan For Critical Expenses
Plan For Audit, accounting and finance (public cos) costs
Ensure Debt Servicing happens without a hitch
Ensure Customer Engagement & Touch points managed well
Don’t get Sunk / Don’t Run out of money
11. Thank you
I hope these tips helped!
Any help or need clarifications, reach out to azkuma@gmail.com