When Cash Is All That Matters

If in ordinary times Cash is King, then in distressed or turnaround situations it must take on God-like proportion. During troubled times everything and everyone in the business has to be focused on cash generation and preservation. Operators also need a reliable tracking and early warning system with sufficient detail to alert management to possible problems on the horizon. This article points out the critical need for focused management of the problem and offers practical advice and techniques for triaging critical cash challenges.

“Distressed organizations and their stakeholders face an extraordinary operating environment, one that is harsh, unforgiving, ambiguous, and exigent. The time available for management to make decisions is substantively determined by available cash.The necessity and scarcity of cash jointly determine the goals of cash management: to control and conserve, and to find new sources. Thus, cash management in a distressed setting first involves husbanding all resources and then allocating them by priority in a disciplined manner.” Source: Cash Management in Distressed Organizations — Turnaround Management Association

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