# Cash Flow Maximization

> Optimal financial decisions on working capital, payment terms and allocation to maximize results.

Working capital is a constrained allocation decision, and it is rarely treated as one. Orion models payment terms, credit lines, inventory and commitments in a single optimization problem, finding the policy that sustains the operation at the lowest financial cost.

## Overview

- Area: Financial Decisions
- Delivery: customizable solution
- First pilot: about 8 weeks
- Solution 14 of 15
- Topics: Working capital, Cash conversion cycle, Stress scenarios

## When this decision gets expensive

If two or more sound familiar, this solution will most likely pay for itself.

- The cash projection is redone by hand every week.
- Receivables financing and credit decisions are made under pressure.
- Payment and collection terms are negotiated without a view of the full cycle.
- There is no quantified stress scenario for a drop in revenue.

## What Orion delivers

- A cash optimization model integrating payment terms, credit lines and commitments.
- Cash projection by scenario, with enough lead time to decide without pressure.
- A recommended policy for receivables financing, investment and use of credit lines.
- Stress testing for revenue drops and late receipts.

## Technical foundation

- **Intertemporal optimization:** Multi-period linear programming over inflows, outflows and financial instruments.
- **Stochastic scenarios:** Simulation of receipts and demand to size the liquidity cushion.
- **Total cost of capital:** An explicit comparison between the financial cost and the opportunity cost of each policy.

## Indicators tracked

- Cash conversion cycle
- Financial cost as a share of revenue
- Working capital requirement
- Fit of the projection to actual cash

## Talk about this solution

WhatsApp: https://api.whatsapp.com/send/?app_absent=0&phone=5554991678345&text=&type=phone_number
E-mail: orion@orionotimizacao.com
Full method: https://orionotimizacao.com/en/method

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