Workshop Title: Banking the CFO’s Journey : Aligning Solutions to Business Life Cycles

CHAPGPT: Based on these input about the CFO strategies and the bankers’ business opportunities to advise and propose banking solutions, please design a 8 hours workshop, taking a story telling style for a real life company with tables of balance sheet, income statement, cash flow statements. Show how the company going through growth, mature and decline phases and what are the banker’s advice/proposal to the CFO to support his objectives. CFO and banker should have Aisan names.

Objective:

This workshop helps bankers understand how to identify CFO priorities at different stages of a company’s lifecycle (growth, maturity, and decline). Participants will learn to align banking solutions with real-world CFO objectives by analyzing financial statements and engaging in solution-driven storytelling.

Structure:

Duration: 8 hours
Style: Storytelling with financial data, interactive discussions, and practical exercises.
Case Study Company: LuminaTech Pte Ltd, an Asian-based electronics manufacturing company.

Key Characters:

• CFO: Mr. Daisuke Tanaka
• Banker: Ms. Priya Sharma

Workshop Agenda

1. Introduction to the Workshop (30 minutes)

• Overview of CFO strategies and banking opportunities.
• The importance of understanding the company lifecycle.
• Story setup: LuminaTech Pte Ltd—a company in the electronics industry.

2. LuminaTech’s Growth Phase (2 hours)

Story Background:

• Timeline: 2016-2020
• LuminaTech, led by CFO Mr. Tanaka, has seen rapid revenue growth, expanding into Southeast Asia.
• Financial highlights:
• Revenue CAGR: 25%
• High capital expenditure in new manufacturing facilities.
• Tight liquidity due to aggressive growth strategy.

Key Challenges:

• Managing cash flow and liquidity.
• Securing funding for expansion.
• Risk of over-leveraging.

Balance Sheet and Financial Highlights (Extracts):

• Increasing inventory and receivables.
• Rising debt levels due to CapEx.
• Limited free cash flow.

Banker’s Role:

Ms. Priya Sharma’s Proposals:

1. Working Capital Solutions:

• Supply chain financing to optimize cash flow.
• Receivables financing for early cash conversion.

1. Capital Expenditure Financing:

• Term loans for new manufacturing plants.
• Syndicated loans to reduce single-lender exposure.

1. Risk Management:

• Hedging strategies to mitigate FX risk (exports to the US).
• Commodity price hedging for raw materials.

Activity:

• Participants analyze a simplified cash flow statement and propose banking solutions for CFO Tanaka.

3. LuminaTech’s Maturity Phase (3 hours)

Story Background:

• Timeline: 2021-2025
• LuminaTech stabilizes as a market leader but faces margin pressures due to increased competition.
• Focus shifts to efficiency, profitability, and shareholder returns.

Key Challenges:

• Improving margins and profitability.
• Managing debt levels.
• Optimizing capital structure for shareholder value.

Balance Sheet and Financial Highlights (Extracts):

• Lower revenue growth (5%).
• Strong but uneven cash flows.
• Increasing dividend payouts and share buybacks.

Banker’s Role:

Ms. Priya Sharma’s Proposals:

1. Profitability Solutions:

• Advisory on operational cost efficiency.
• Structured solutions to refinance high-cost debt.

1. Shareholder Value Creation:

• Financing for share buybacks or dividend recapitalization.

1. Risk Mitigation:

• Advanced derivatives to lock in predictable cost structures.

Activity:

• Participants assess LuminaTech’s income statement and propose strategies to improve net profit margins.

4. LuminaTech’s Decline Phase (2 hours)

Story Background:

• Timeline: 2026-2030
• LuminaTech experiences declining revenues due to technological disruption and market saturation.
• CFO Tanaka’s focus shifts to restructuring and divestitures to sustain operations.

Key Challenges:

• Managing declining revenues and profitability.
• Divesting non-core assets to generate cash.
• Preparing for potential M&A or exit.

Balance Sheet and Financial Highlights (Extracts):

• Reduced revenues (-10% YoY).
• High debt-to-equity ratio.
• Increasing liquidity pressures.

Banker’s Role:

Ms. Priya Sharma’s Proposals:

1. Restructuring Solutions:

• Advisory on selling non-core assets.
• Bridge financing to ensure operational continuity during restructuring.

1. Turnaround Financing:

• Debt restructuring to extend repayment terms.
• Working capital loans for short-term liquidity.

1. M&A Advisory:

• Preparing LuminaTech for a potential merger or sale.
• Financing potential buyers to facilitate transactions.

Activity:

• Participants evaluate LuminaTech’s balance sheet and draft proposals for restructuring.

5. Conclusion and Key Takeaways (30 minutes)

• Recap of key lessons from LuminaTech’s lifecycle.
• Discussion: How bankers can position themselves as strategic partners to CFOs.
• Open Q&A with reflections on challenges and solutions presented.

Learning Outcomes

By the end of the workshop, participants will:

1. Understand the CFO’s priorities at different stages of the business lifecycle.
2. Analyze financial statements to identify company needs.
3. Propose tailored banking solutions to support growth, profitability, and restructuring.
4. Build confidence in engaging CFOs with strategic advice.

*** To include 3 phases of Financial Statements from real companies from Growing, Maturing, Declining… at least 3 years each phase.

Please propose specific questions and answers that the banker should seek from analysing available information or ask the CFO if not available from information on hand. The questions and answers are to determine the phase the company is in and the products or services should be proposed to the client.

Here are specific questions and answers the banker should analyze or discuss with the CFO to determine the corporate life cycle phase and propose suitable products or services:

1. Questions to Determine the Phase

Growth Phase

1. Revenue Trends

• Q: How has your revenue been growing over the past three to five years?
• A: Revenue has been growing at double-digit rates, driven by new market penetration and increased demand.

1. Capital Expenditure (CapEx)

• Q: What percentage of revenue is being reinvested into CapEx?
• A: Approximately 15-20% of revenue is allocated to CapEx for expansion into new facilities or acquiring equipment.

1. Operating Cash Flow

• Q: Are operating cash flows positive, or is the business reliant on external funding?
• A: Operating cash flows are moderate, but the business is primarily reliant on debt or equity to fund expansion.

1. Key Challenges

• Q: What are your main operational or strategic challenges?
• A: Access to sufficient working capital and funding growth initiatives are critical.

Banker Proposals:

• Working capital loans.
• Trade finance solutions like letters of credit or supply chain financing.
• Equipment financing or leasing.
• Debt syndication or equity raising advisory.

Maturity Phase

1. Revenue Stability

• Q: Are revenues steady with incremental growth year-on-year?
• A: Revenues have stabilized at mid-single-digit growth, and market share is consistent.

1. Debt Levels and Liquidity

• Q: How are debt levels and liquidity being managed?
• A: Debt levels are moderate, and liquidity is adequate with consistent positive operating cash flows.

1. Profit Margins

• Q: Are margins stable or under pressure?
• A: Margins are stable due to economies of scale and streamlined operations.

1. Dividend Policy

• Q: Is the company focusing on returning value to shareholders?
• A: Yes, dividends are being paid regularly, and share buybacks are being considered.

Banker Proposals:

• Cash management solutions.
• Dividend payment advisory or share buyback financing.
• Hedging solutions for currency or interest rate risks.
• Long-term loan consolidation or refinancing.

Decline Phase

1. Revenue Trends

• Q: Are revenues declining? If yes, at what rate?
• A: Revenues are declining at a mid to high single-digit rate annually due to reduced demand or competition.

1. Asset Disposal

• Q: Are there plans to sell underutilized assets?
• A: Yes, we are considering asset sales to free up cash.

1. Debt Management

• Q: Is the company facing challenges in meeting debt obligations?
• A: Debt repayment is becoming more difficult due to declining operating cash flows.

1. Turnaround Strategy

• Q: Are there initiatives in place to stabilize or pivot the business?
• A: We are exploring cost-cutting measures and potential mergers or acquisitions.

Banker Proposals:

• Restructuring loans or distressed asset financing.
• Advisory for mergers, acquisitions, or joint ventures.
• Asset-backed loans or sale-leaseback arrangements.
• Risk management tools to hedge against further declines.

2. General Analytical Questions for All Phases

1. Working Capital Cycle

• Q: How efficiently are receivables, inventory, and payables managed?
• A: Delays in receivables collection have stretched the cash conversion cycle, requiring additional working capital support.

1. Market Position

• Q: How is the company positioned relative to competitors?
• A: Competitive pressures are increasing, requiring strategic investments in innovation or marketing.

1. Debt Maturity Profile

• Q: When are significant debt repayments due?
• A: A significant portion of debt is maturing within the next two years, requiring refinancing.

1. CFO’s Strategic Goals

• Q: What are your top three priorities in the next 12-24 months?
• A: Focused on margin improvement, deleveraging, and preparing for potential acquisitions.

Proposals Across Phases:

• Tailored funding solutions aligned with debt maturity profiles.
• Advisory on capital structure optimization.
• Solutions to streamline treasury operations and enhance liquidity.
• Partnerships for long-term strategic goals like ESG financing or sustainable initiatives.

This structure allows the banker to guide conversations effectively, assess the company’s phase, and craft tailored proposals that resonate with the CFO’s strategic objectives.

Need to include the business discovery materials..