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Turnaround, Cash Preservation & Restructuring Guide
Navigate cash-crunch crises, asset liquidation, and debt restructuring for struggling enterprises.
How to Structure This Case Type
1. Immediate Solvency Audit: Determine cash runway, immediate creditor obligations, and critical payroll requirements.
2. Strategic Cash Preservation: Stop non-essential projects, suspend marketing spend, extend accounts payable terms.
3. Operational Rationalization: Sell non-core business segments, liquidate idle inventory, close sub-optimal depots.
4. Financial Restructuring: Renegotiate banking covenants, issue convertible notes, or request structured capital.
Key Skills Interviewers Evaluate
Cash Flow Modelling, Strategic Liquidation Analysis, Debt Restructuring Dynamics
Industries Where This Case Type Appears
Commercial Transportation, Brick & Mortar CPG, Power Utilities
Example Case Prompts
1. "A regional freighter fleet has exactly 90 days of cash remaining and operates with structural losses. Devise a crisis turnaround plan."
2. "A physical department store chain wants to exit three poor-margin states while protecting current franchise agreements."
Partner-Standard MECE Issue Tree: Indian Airline Turnaround
Case Title: Indian Airline Turnaround
Industry: Commercial Aviation | Target Company: Indian Domestic Airline
Prompt: "Your client is an Indian airline company facing a severe decline in profitability. Devise a turnaround plan focusing on identifying loss-making components and optimizing the value chain."
Optimal Analytical Issue Tree Diagram:
- Airline Turnaround Plan (root)
- Revenue Optimization (derived)
- Ticket Price Adjustment [Value: Justified by quality]
- Ancillary Services (F&B) (★ Key Path)
- Operational Rationalization (segment) (★ Key Path)
- Fuel Consumption (★ Key Path)
- Route Selection (★ Key Path)
- Aircraft Efficiency
- Refueling Site Strategy [Value: Single airport focus]
- Employee Salaries (context)
Frequently Asked Questions
Under turnaround pressure, should we prioritize profitability or liquidity?
Always prioritize cash liquidity. An enterprise can stay unprofitable for years with cash, but collapses instantly with zero cash.
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