Examining Cash Flow Deviations

The Situation

A merchant power generation company was experiencing significant deviations from managements' cash flow projections.

NERA's Role

The merchant's Board of Directors hired NERA experts to examine the source of cash flow deviations and suggest improvements to increase the accuracy of cash flow forecasting. NERA examined data from all recurring sources and uses of cash as well as management's methodologies for forecasting cash flows. NERA also examined the underlying drivers of the cash flow items that caused the most significant deviations.

The Result

NERA provided the board with a detailed explanation of deviations, and provided suggestions for improving both the forecasts themselves and the reporting procedures around cash flow projections.