Majjag has best practice tools to provide visibility into cash decisions and the impact on your bank account:

·         Cash Forecast – daily and weekly models to help gain visibility into cash impact levers and how to manage them

·         Cash Cycle Management – Optimize the impact of Receivables and Payables

·         Expense Control – Reduce unnecessary spending by understanding the ROIs on spends

CASE STUDY: A $50M Manufacturer's Cash Flow Survival Story

The Call That Changes Everything

The Owner’s phone rang at 3 PM on a Tuesday.

Their largest customer—representing 8% of annual revenue—was terminating their contract. Effective in 90 days.

Just like that, $4M in revenue was gone.

The Math Was Brutal

For a $50M manufacturer with heavy fixed costs, this wasn't just a revenue problem—it was an existential threat:

• Revenue down 8% ($4M annually)

• Fixed costs unchanged (equipment, facilities, overhead)

• Variable cost savings minimal (can't lay off entire teams)

• Net income projected to drop 40%

But the real danger wasn't the P&L—it was the cash crunch:

• Existing bank covenants now at risk

• Working capital line near its limit

• Quarterly debt service payments still due

• No margin for error

The Owner's fear: "We might not make payroll or debt payments."

The Emergency Plan

Majjag arrived with one mandate: Keep cash in the bank and avoid default.

We had to find liquidity fast—not by cutting people, but by optimizing what they already had.

The Working Capital Audit (Week 1)

We analyzed every dollar tied up in operations:

Accounts Payable Analysis:

• Current payment practice: Paying vendors in 15 days on average

• Contracted terms: Net 30-45 days

• Opportunity: $890K in float being left on the table

Accounts Receivable Deep Dive:

• Average DSO: 52 days (industry benchmark: 35-40 days)

• Collection process: "Wait for customers to pay"

• Opportunity: $1.4M in accelerated collections

Inventory Assessment:

• Safety stock levels: Set 10 years ago, never updated

• Ordering patterns: Quarterly bulk orders "for better pricing"

• Obsolete stock: $340K identified

• Opportunity: $1.1M in inventory reduction

Capital Expenditure Review:

• Approved projects: $1.3M for current year

• Projects with immediate ROI: $400K

• Projects with "nice to have" justification: $0.9M

• Opportunity: $0.9M in deferred spend

Total Identified Cash Opportunity: $4.3M

The Results: Cash Flow Miracle

Despite 8% Revenue Decline and 40% Net Income Drop

Cash in the bank increased $300k which was a cash safety level to cover payroll and debt for 30 days.

Not only did the company meet every debt obligation on time, they:

• Proactively communicated the situation to their bank

• Demonstrated operational discipline and cash management

• Actually improved their banking relationship through transparency

The lesson: When revenue drops, profit follows—but cash flow is a choice.