Financial planning and analysis: Rapid scenario planning and business intelligence

Common challenges and worries

  • Increased pressure to re-forecast cash flows and scenario analysis from internal and external stakeholders (e.g. board of directors, shareholders/investors, creditors, etc.)
  • Having sufficient forecast information to enable your sales and operational teams to make effective decisions (e.g. forecasts by SKU, region, etc.)

  • Ensuring your forecast tools can adequately capture “downside” scenarios, incorporating impacts of fixed, variable and step-variable costs as well as sales and operational planning issues (e.g. supply chain).

  • Ensuring you have robust forecast assumptions/drivers to allow you to confidently communicate the expected impact of COVID-19 on your business. For example:

    • What is the overall impact on demand for our sector and business compared to others?

    • How would a lockdown impact our business (e.g. demand, sales channels, workforce productivity, etc.)?

    • What is our exposure to “at risk” markets (e.g. demand, supply chain, counterparties, etc.)? 

  • Understanding the potential impacts on your bank covenants, credit agreements and normalization adjustments for EBITDA.

Suggested next steps

  • Rapid assessment of your current state forecasting and scenario planning capabilities. In particular, forecast tools needed to enable rapid updates and their granularity must meet the needs of relevant stakeholders to support better decision making, particularly around sales and operational planning.
  • Leveraging data and analytics to provide better business intelligence supporting your forecast assumptions (e.g. extracting data on demand and supply chain trends by SKU/region).

  • Leveraging external data sources and predictive analytics to enhance the forecast process, including consideration of impact of comparable incidents (e.g. SARS, swine flu, etc.)

How we’ve helped others

  • Development of strategic cash flow models based on value drivers that are aligned to the needs of the business and key stakeholders.
  • Development of 13-week cash flow models (based on receipts and disbursements of the business) that incorporate demand and supply chain realities to better manage day-to-day cash flow.

  • Leveraging data and analytics to develop better business intelligence for forecast assumptions that incorporate internal and external data sources.

  • Utilizing predictive analytics to help forecast demand based on key variables (e.g. demographic, macroeconomic trends, prior incidents, etc.)

  • Detailed scenario modelling, including the impact on covenant, credit agreements and normalized EBITDA.

You are not alone. We are here to help.

  • Driver-based strategic planning models that forecast cash flows under various scenarios.
  • Detailed 13-week cash flow models to support day-to-day cash flow management.
  • Data and analytics to provide better business intelligence for key forecast assumptions.
  • Predictive forecasting to provide greater insights into demand forecasting and risk assessment.
  • Financial model review to enhance confidence in your forecast tools. 

Contact us

Michael Shea

Michael Shea

Partner, Value Creation, PwC Canada

Tel: +1 416 687 8025

Michael McTaggart

Michael McTaggart

Partner, Corporate Advisory and Restructuring, PwC Canada

Tel: +1 416 687 8924