Vantage Analytics Is Profitable and Nearly Out of Cash
Finance
medium30 min0 submissionsRazorpay
Scenario
Vantage Analytics is a B2B SaaS business in India. Last year it reported ₹145 Cr of revenue, a gross margin of 39%, and a net profit margin of 5% — its third consecutive profitable year.
The CEO is baffled. The company has ₹4 Cr in the bank, has drawn ₹59 Cr of its overdraft facility, and has twice delayed supplier payments this quarter.
Balance sheet metrics:
- Days sales outstanding: 104 days
- Days inventory outstanding: 48 days
- Days payables outstanding: 51 days
Revenue grew 17% last year, and the sales team is targeting similar growth again.
Supporting data
liquidity
- cash cr
- 4
- overdraft drawn cr
- 59
working capital
- days sales outstanding
- 104
- days payables outstanding
- 51
- cash conversion cycle days
- 101
- days inventory outstanding
- 48
income statement
- revenue cr
- 145
- net margin pct
- 5
- gross margin pct
- 39
- revenue growth pct
- 17
Your task
Explain to the CEO what is happening and what to do about it. Provide:
- Analysis — why a profitable company is short of cash.
- Risks — what happens if nothing changes.
- Recommendation — the specific actions you would take, in priority order.
Ready to move forward? Up next: Halcyon Bank: Can We Raise Prices 16%?Next question
How you'll be graded
100 points, 60% to pass.
- diagnosis30
- recommendation25
- risk assessment15
- financial analysis30
Hint
Reveal suggested structure
- Cash conversion cycle = DSO + DIO − DPO = 104 + 48 − 51 = 101 days.
- Cash tied up ≈ (CCC ÷ 365) × revenue.
- Growth makes it worse — every extra unit of revenue funds more receivables and inventory before it produces cash.
- Levers, in order of speed: collections, inventory, payment terms.
- Quantify the cash released by improving each lever.