So-called financial debt is, in fact, a mix of various relevant variables, each of them with their own peculiarities and impacts, whether in the cash flow, in the company’s operation or, because of these, in the company’s results.
One of the most well-known variables is the debt/EBITDA ratio, which represents the operating margin. Some may say that if debt is up to 3 times the EBITDA, it is a good indicator. However, is this indicator relevant to your company?
Besides the ratio of debt to EBITDA, the company’s debt structure is very significant, although this indicator alone is not enough, as it is of the utmost importance to analyze the link between the business’s profile and the characteristics of the payment flows.
It is also crucial to consider that the evolution of business has been demanding asset light and flexible companies, with the ability to adjust the routes and tactics whenever needed. This flexibility is directly related to the definition of the assets that the company may keep ownership of, and which of those present monetization and optimization opportunities. Although not a trivial decision, it could be more advantageous to get rid of certain assets and generate immediate liquidity, thus preventing compromisation of capital.
Bearing in mind the new aspects of the credit market, Imeri Capital acts as an adviser to companies with a thorough approach, which contemplates the debt from a business perspective and seeks to optimize and/or monetize existing assets and liabilities. This way Imeri can help the company to focus its energies on its core business. This approach has contributed to potential creditors and existing ones, leading them to have a better view of the company, and, therefore, to be more willing to adjust their debt structure. We would be pleased to schedule a meeting in order to provide a deeper understanding of the subject and to assist in the pursuit of possible solutions.