Data Visualization- To Meet The Business Objectives.

Data Visualization for Credit Analysis in a Spread Sheet

The Home appliance companies are using Data Visualization to meet their business objectives. Recently our team did a project with one of the fastest growing home appliance companies in USA. Here is what we performed for the company. 

Business Challenge

With the company slated to make investments in the next financial year, the CFO needed to prepare credit requirements for the coming year. Historically, 70% of the company’s financing requirements were met by credit line from a bank. Realizing this, the CFO wanted to analyze the cash flows to predict credit line requirements and renegotiate the terms for a new credit line.

The Solution

We designed and implemented a comprehensive model that projects cash inflows and outflows of the company. The user, for the analysis, is given a choice of altering the inputs and/or performing a what-if analysis to seek the key metrics for a given condition. The user can also estimate the required return on investment or the closing balance at the end of previous year to be able to make do with current line of credit.

Inputs

The inputs are classified into collections, payments, other variables and investments. The user can vary key variables and instantly visualize the results in a chart.

What-if Analysis

The model allows the user to conduct “what-if” analysis to seek the credit line requirements under different circumstances. She/he can also vary forecast by a percentage or vary performance in all months by a user defined percentage and review the results.

Outputs

For the ease-of-use, the model dynamically portrays cash flows of the company and highlights the minimum and maximum financing requirements.

Impact

The model gave our client a clearer understanding of the company’s credit line usage. With the insights gained from the model, our client was able to predict the financing requirements and the necessary agreements based on performance measures. Armed with this information our client successfully negotiated a new credit line that would allow the company to make the investments as planned. With the new credit line, the CFO attained the flexibility of making investments as and when required without accruing interest costs.