Historically low-interest rates can give the impression that money has a very low cost, but shareholders have a higher expectation of profitability from capital employed (WACC: weighted average cost of capital) than market rates. In other words, there are two main ways to create shareholder value: increase operating income or decrease capital employed.\u00a0<\/span><\/p>\n Whether it is a question of increasing leeway or financing growth, sustainable optimization of the working capital requirement relies on a combination of quick-wins to accelerate savings and longer-term actions to ratchet benefits.<\/span><\/p>\n A selection of pragmatic actions can generate benefits as early as a few weeks into the project and build momentum. For example, setting up a collections unit can drive down payment delays by 30 – 50% in a few weeks.<\/span><\/p>\n Reducing inventory by around 10 – 30% or receivables by 5 – 10% demands a profound change in processes and behaviors within the enterprise, which cannot be done without working on all transformation aspects (leadership, know-how, membership and culture).\u00a0<\/span><\/p>\n To achieve sustainable results, it is also necessary to clarify responsibilities and deploy a structure dedicated to managing working capital with quantified objectives (collective and individual), governance and visibility (through dashboards).<\/span><\/p>\n Argon & Co differs from generalist firms in its ability to mobilize teams specialized in supply chain and finance optimization to address cash flow optimization in an integrated manner.<\/span><\/p>\n We favor a pragmatic approach, aimed at fast-tracking benefits and embedding new behaviors to sustain results.<\/span><\/p>\n Assessment of the optimization potential and building the trajectory<\/span><\/p>\n Transformation launch and activation of the first benefits<\/span><\/p>\n Earnings industrialization and sustainability<\/span><\/p>\n Introduction and challenges Historically low-interest rates can give the impression that money has a very low cost, but shareholders have a higher expectation of profitability from capital employed (WACC: weighted average cost of capital) than market rates. In other words, there are two main ways to create shareholder value: increase operating income or decrease capital […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":5397,"menu_order":13,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-5382","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"\nHow we can help<\/b><\/h2>\n
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