For Commercial Bankers & Lenders Serving Manufacturers: Why Doesn’t Revenue Concentration Tell the Whole Customer Concentration Story?
Zero-Click Answer Revenue concentration tells a lender how much of a manufacturer’s sales depend on a particular customer, but it does not necessarily reveal how much of the manufacturer’s profitability or cash generation depends on that customer. A customer representing 30% of revenue could represent substantially more—or substantially less—than 30% of contribution depending on pricing, […]
What Working Capital Warning Signs Are Hidden in Manufacturing Production Data?
Direct Answer Many manufacturing working capital problems become visible in production data months before they appear in financial statements. Declining inventory turns, increasing work-in-process inventory, longer production cycle times, worsening yields, and declining schedule attainment often signal future liquidity pressure before lenders see changes in EBITDA, borrowing base utilization, or covenant compliance. For commercial bankers, […]