From the numbers to the change
- Your numbers sayProfit is positive, borrowings keep climbing
- The cause underneathProfit is being converted into stock, debtors and drawings
- What changesRelease trapped cash, stop the leak, reset the debt plan
- What to expectBorrowings stop rising, then fall
An illustration of how the thinking runs, not a client result.
Where the money usually goes
In stressed businesses the leak is rarely one thing. It is usually a few of these working together:
Trapped in working capital
Profit becomes debtors and stock instead of cash.
Lost in margin
A few points of gross margin on large sales is a large sum.
Paid out
Promoter drawings, related-party loans and personal costs through the business.
Eaten by interest
Borrowing used to fund losses, not assets, grows by itself.
The cash map we draw first
From the balance sheet and profit and loss we build a simple map: profit earned, plus depreciation, less cash tied up in debtors, less cash tied up in stock, plus extra credit from suppliers, less loan repayments and drawings, equals change in cash. The map shows in one page why a profitable year ended with less money, and which line to attack first.
Try a version yourself with the margin bridge calculator.
The usual fixes, in order
Stop the outflow
that is not producing return: unreviewed expenses and drawings above what the business can afford.
Release trapped cash
through collections, stock clearance and tighter credit.
Repair margin
by pricing and mix once the cash is safe.
Reset the debt
so repayments match what the repaired business can carry.
Business under pressure? Let a CFO read your numbers.
A senior CFO reads them with you and tells you what is really going on. No cost, no obligation.
Where it connects to your wider finances
Several of our owner-question pages cover pieces of this: profit but no cash, how much promoters can take and why the bank limit is always full.
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
Before CFOSurge came into the picture, our business lacked financial discipline. Once their team started overseeing our finances, everything fell into place. There was accountability and when you know someone is keeping track, you ensure things get done properly. It’s been three years and the systems they put in place are still working well. Our business is in a much better position today.
They even worked with us to finetune our software (Gross Mart) so we could get micro-level details on various aspects of the business. On top of that, they streamlined our receivables follow-up process and provided valuable guidance on bank loans and valuations.
Their structured MIS reports have given us clear visibility into our business performance, enabling faster and more informed decisions. The budgeting and cash flow monitoring system introduced by their team has helped us plan our funds more effectively and manage our operations with greater confidence.
Quoted word for word from our clients. Read more client words →
Questions owners ask us
What is a financial turnaround?
Restoring a business whose problems are financial: low margins, trapped cash, heavy debt or missed payments, by diagnosing where the money went and fixing it.
How is it different from a normal turnaround?
A turnaround may be operational, commercial or financial. A financial turnaround is led from the numbers and focuses on cash, margin, working capital and debt.
Can profit and a cash shortage exist together?
Yes. Profit is an accounting measure. Cash can be tied up in debtors, stock, loan repayments and drawings while the profit and loss shows a surplus.