Capital Management is where every engagement begins. We analyze the business and the Ownership behind it, model what the company is worth and what it could be worth, and put numbers to the paths in front of the Owner. Two objectives govern all of it: free cash flow rising, and the cost of capital falling. The analysis comes first, the destination is allowed to change, and everything the other two pillars execute traces back to what gets decided here.
Capital Management path Capital Management Initial milestones complete: new options join the path. It begins with a memo. Two objectives: free cash flow rising, cost of capital falling. Analysis. Learning. A living record of progress. Σ FCFF ( 1 + g + LAE )t ( 1 + WACC − LAE )t Paths valued: outcomes, risks, profits, options. The destination is allowed to change. Where, FCFF = Free cash flow to the firm g = growth rate WACC = weighted average cost of capital LAE = Leather Apron Effect
Two objectives govern everything.
The trajectory rising.
The cost of capital falling.
Everything else is secondary, and serves these two.
The memo takes days. The full picture takes months.
The destination is allowed to change.
SERVICES
BEHAVIORAL FINANCE
we start here, understanding behavioral tendencies and limitations, and communicating these to clients. Every company also carries risks specific to itself, magnified at the closely held level; the risks you can’t diversify away deserve the most attention.
FINANCIAL MODELING
we study who your customers are, their behavior, and the externalities driving their habits, then work down the ledger alongside the Owner until the costs are understood completely. The statements follow: cash flow the Owner and CFO genuinely use, and the balance sheet, because P&L projections are pointless without one.
CAPITAL STRUCTURING
we help the Owner and CFO finance a profit-producing purse of assets, squeeze cash out of it when that’s the move, or hold a healthy balance when it isn’t. Capital investments get the same discipline, financing matched to asset life, timing positioned against the cycles.
EARNINGS AND CASH FLOW ANALYSIS
the bank’s EBITDA, the buyer’s, the tax return’s, and the one the Owner carries in their head rarely match; we define and reconcile each so the number quoted in any room survives diligence. Free cash flow is the number everything else serves, and the outflows to Ownership are planned deliberately against it.
VALUATION AND PROJECTIONS
we value the company as it stands today as a going concern, then value the path options possessed by Ownership, an ultra comprehensive picture that holds up with lenders, capital providers, and buyers alike. Annual projections carry it forward, built the way an institutional portfolio manager would want to receive them.
ACTUALIZATION
where the analysis becomes real. Capacity measured, the probable buyer understood, the company’s story defensibly told and formed to the specifications of the most demanding audience, before that conversation ever starts. Significant negotiation power, in the Owner’s corner, ahead of time.
GLOBAL ANALYSIS AND CAPITAL PLANNING CONTINUATION
we analyze the business and the Owner’s personal financial resources as one cohesive unit, personal guarantees included, because that’s how the Owner actually lives them. Leather Apron works with clients throughout the year; as milestones are crossed new objectives are formed, and we’re there throughout the lifecycle.
ABSTRACT ANALYSIS
the analysis nobody can name until the situation produces it. Like its siblings closing the other two pillars, this is the work Leather Apron does best: unconventional questions, taken seriously, answered with the same rigor as everything above.