The Value of the WCashPlus™ Process

The Process is particularly valuable in the following circumstances :

  1. At the beginning an investment : enabling debt to be paid down early  in the life of the investment, reducing interest expense and providing headroom for covenants.
  2. Towards the end of an investment : where the Process generates cash to pay down the debt prior to the planned sale of the company, capturing value for the owners that would otherwise have been transferred unrecognized to the buyer.
  3. When the company is debt-free, or can be re-capitalized as a result of the WCashPlus™ Process : allowing the cash generated to flow immediately to the owners through the payment of a dividend.
  4. When a company is going through a troubled period : where the cash generated can alleviate issues with Covenants and avoid the need for a further injection of cash by the investors.

The Process Itself

The WCashPlus™ Process is designed to generate a significant amount of cash within a relatively short timeframe. It achieves this through creating an intense, rigorous focus on:

  1. Reducing the Accounts Receivable DSO’s in partnership with customers
  2. Reducing Raw Material & Finished Goods Inventory
  3. Increasing Credit Terms in partnership with vendors

The “Plus” part of the Process has the potential to create additional value by increasing EBITDA through:

  1. Reduction of the price of Goods & Services
  2. Reduction of Obsolete Inventory Write-Off
  3. Reduction in warehousing costs
  4. Reduction of Bad Debt

The WCashPlus™ Process is totally self-funding

  1. The Process pays for itself from the savings in interest costs alone.
  2. The only outlay is a modest Commitment Fee, after which the Process is funded purely by a Success Fee based on an agreed percentage of the incremental Cash. The rate takes into account interest rates, the overall reduction potential, and the agreed-upon term of the contract.
  3. The Success Fee is based on the $ value of the reduction in Net Working Capital days.
  4. Agreed expenses including travel & lodging are reimbursed at cost.
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