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Data Analysis and Financial Modeling to Evaluate Tariff Impact

03.04.2020

Challenge: A private equity-owned consumer products importer was negatively impacted by recent tariffs imposed by China. The tariffs highlighted risks to the business and generated questions from a lender on the business model’s long-term viability. Management needed to explain the recent low performance in the tariff environment.

Opportunity: Brown Smith Wallace was engaged to examine the importer’s historical and prospective financial data and internal analyses to gauge the Chinese tariffs’ impact on sales volume, profitability, refunds, future forecasting, standard costing and inventory valuation.

Delivery: Our data analytics, financial modeling and business process improvement experts examined, stratified and analyzed sales and pricing data on over 2,000 SKUs during the timeline of the tariffs. We developed our own informed projections and estimated the impact of the tariffs on cash flow going forward. Our detailed report gave the lender comfort that the importer had the capacity to satisfy its debt obligations going forward, even if tariffs persisted.

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