Danske Navigator is an analysis tool for predicting the future results of your company's strategy.

View projections of your company's income statement, balance sheet and cash flows for the next five years.
See what impact market volatility or changes in assumptions have on your company's financial performance.
Compare your company's financial performance to that of selected competitors.
A Navigator report provides valuable input for your efforts to develop your company.

Danske Navigator is a strategic analysis tool that provides you with an overview of the financial impact of your company's strategy – both now and in the future.


On the basis of your current plans for the future, we will prepare a financial forecast, a peer group analysis and a simulation of their impact. This will generate an individual report that will enable us to provide financial advisory services customised to your specific needs.

The analysis relates to five main areas:

Budget

We base projections on recent years' developments. The projection of your company's income statement, balance sheet, cash flows and several other key financial ratios will allow you to identify target areas well in advance. If you don't have estimates for all key ratios, we will use the most recent years' developments as a guideline.

Cash flows

Your company's cash flows are the main parameter for Danske Navigator. By focusing on improving your cash flows, your company can reduce its financing costs and cut interest expenses.

We can also simulate developments in your company's free cash flow in line with market trends: changes in commodity prices, market share, exchange rates, selling prices, etc.

If your competitors' financial statements are publicly available, we can compare your business and your working capital with those of your competitors. This may serve as an inspiration for making adjustments and help boost your competitive strength.

Your company's cash flows
are the main parameter for Danske Navigator

Capital structure

Developments in the free cash flow have a direct impact on how your company's capital structure evolves and affect the relation between equity and debt. Using Danske Navigator, we are able to analyse the effects of the estimated free cash flow on your capital structure and solvency – and estimate your future credit needs.

Key credit ratios

A good credit assessment will give you easier access to cheap financing, both with Danske Bank and with your suppliers. For this reason, expected developments in other key credit ratios are also a key parameter in Danske Navigator. This will allow your company to influence developments before the situation reaches a level that external parties may consider to be critical.

Dividend strategy

Your future dividend strategy is compared against your investment plans, credit needs and earnings performance.

The analysis will further examine the effect of different dividend strategies on your key credit ratios for the coming years.

That way, you can avoid dividend distributions becoming excessive and impairing your creditworthiness.

Danske Navigator adds value and momentum to your company's decision-making processes. See the below examples of situations in which Danske Navigator can help you create an overview:

"What are we doing wrong – our business is growing?"

A recently established design company had been very successful, and orders kept coming in. In recent years, its turnover had risen significantly. Nevertheless, the company needed to increase its overdraft facility and contacted us.

Danske Navigator turned the spotlight on cash flows

In preparation for the meeting, the company had provided information on its expectations for the years ahead. This information was used as input for the Danske Navigator analysis.

Danske Navigator computed the key ratios, which showed that the company's capital structure no longer matched its growth.

As a result of the company's failure to generate a sufficient free cash flow, the overdraft facility had to be increased at regular intervals.

 

This was caused by a combination of a relatively small operating margin and increasing amounts of cash being tied up in inventories and trade debtors, which in turn led to higher interest expenses. As a result, there was an actual risk that the company's financing options would be restrained.

The company chose to lower its growth ambitions for a while and subsequently focused on consolidation. At first, this caused a slight fall in turnover, but the company's operating margin increased, and its liquidity improved.

The calculations made using Danske Navigator demonstrated
how much a reduction of the company's
receivables would increase liquidity

"How can we reduce drawings on our overdraft facility?"

Danske Navigator showed that the company, as opposed to its competitors, allowed its customers too long a credit period.

Danske Navigator brought attention to liquidity

The calculations made using Danske Navigator demonstrated how much a reduction of receivables would increase liquidity. It also demonstrated how much the company could cut its interest expenses by drawing less on the overdraft facility.

The company subsequently streamlined its invoicing and dunning procedures, significantly reducing cash outflows and lowering interest expenses.

 

In other contexts, Danske Navigator showed similar opportunities for enhancing liquidity and lowering interest expenses. This required the company to expand its inventory and negotiate more favourable payment terms with its suppliers.

"What happens if we lose our biggest customer?"

A medium-sized company contacted us because it was at risk of losing its biggest customer. The company wanted to know what the financial impact would be.

Danske Navigator calculated the impact of losing the customer

The analysis comprised lost turnover and earnings and changes in cash outflows due to changes in working capital (fewer receivables due, a smaller inventory, fewer creditors).

Danske Navigator estimated the cost to the company of meeting its customer's requirements.

We used Danske Navigator to simulate how much the cost would have to be lowered in order to sustain satisfactory operations.

 

Alternatively, the company could try to retain the customer. An important prerequisite would be to offer the customer extended credit. The simulations in Danske Navigator showed how much the company's cash position would be affected if the customer's credit was extended and how much interest expenses would rise.

The company was able to handle both the additional cash outflow and the higher interest expenses. The company therefore offered its customer extended credit, and the customer stayed with the company.

"We want to expand. Will you lend us the money?"

For a Danish company, the answer was yes, but after having been introduced to Danske Navigator, the company chose not to borrow the money.

Danske Navigator helped change the strategy

For many years, the company's strategy had been to supply all products straight away. However, Danske Navigator showed that the company could achieve major savings by reducing its stock, which led it to review all product items.

 

The company decided to change its strategy and discontinue any poor sellers. Instead, the company offered to supply the products against pre-orders. The products eliminated from stock made room for new products.

As a result, the company decided to postpone a contemplated expansion pending the results of the changed inventory strategy.

Danske Navigator may be used for purposes including to analyse the financial impact of current themes relevant to your business; themes that may have been fostered within your company or on the basis of external factors.

1

Current themes:
Defining current themes relevant to your business

You will define the themes that you wish to have reviewed or receive input on. Below, we have listed a number of questions from other companies. We hope they may serve as a source of inspiration.

  • How will our profit, cash flows and debt develop if recent years' trends continue?
  • Can we reduce the drawings on our overdraft facility?
  • Do we have sufficient cash resources for sustaining growth?
  • Our earnings may be squeezed. What impact will that have on our cash flows and debt?
  • What effect will a change of payment terms in relation to our customers or suppliers have?

We will also identify themes assessed to be of relevance to you. We will then prioritise these themes in consultation with you.

2

Analysis:
Danske Navigator analyses your data

The analysis of the basic financial ratios will provide an overview of your earnings, cost level and cash tied up in working capital.

The analysis will be based on recent years' developments, which will then be projected. If the figures are associated with too much uncertainty, we may include alternative scenarios, such as weaker-than-expected turnover growth.

You may also identify one or more companies for comparison. We only need their public financial statements and turnover figures.

We will then use Danske Navigator to analyse the data and present the results to you at our next meeting.

3

Meeting:
Opportunities available to your company

We will identify the opportunities available to you so you can exploit them and strengthen your company's financial performance. Based on your market situation and strategy, we will prepare a set of realistic projections. These projections may be used as a basis for selecting areas where adjustments may be made in order to strengthen your financial situation.


Figures will not be the only topic at our meeting; by using your knowledge of your competitors, products, market opportunities, suppliers and customers, we can give you the best financial advice possible.


The output from the meeting will be a report containing concrete financial recommendations for how to strengthen your company's financial situation and market position.

4

Action:
Achieving your goals

Together, we will formulate conclusions and targets – and ideas for meeting those targets.

We can provide specialist services to suit your needs from cash managers, currency advisers, leasing experts, insurance specialists and financial advisers.

The specialists will provide you with specific recommendations for achieving your goals.

Danske Navigator is a valuable tool for evaluating your financial statements, or for reviewing the impact of a major change of strategy. In brief, it can simulate all the parameters that impact the financial ratios of your company.

Budget analysis

Once the financial statements have been presented, reviewing your performance and achievements is the natural next step. After you have given your views on the trends of the coming years, we can project your future income statement, balance sheet and free cash flow for up to five years. This will provide a solid basis for identifying areas for development. Danske Navigator can also analyse alternative scenarios and provide you with insight into the financial impact of budget deviations.

You don't need to be facing major, strategic decisions
to benefit from Danske Navigator

Changed market conditions

You don't need to be facing major, strategic decisions to benefit from Danske Navigator.


The analysis can be based on a simulation of the impact of price pressures, customer inflows and outflows, changes in payment terms or changes in raw material prices and exchange rates.

Change of strategy

A change of strategy affects many areas, including turnover, earnings, capital structure, debt structure, working capital tie-ups, key credit ratios and dividend options.

Danske Navigator can be used to calculate the impact on a single area or for more complex and opposing effects on income statement, balance sheet and cash flows.

Launching a new product

If you are about to launch a new product, Danske Navigator can estimate the effects of the launch on the current year and future years.


A product launch is often associated with significant costs, and that requires cash resources. Danske Navigator allows you to simulate the amount of cash required.

New markets

If you are considering entering new markets, Danske Navigator can provide you with an overview of the financial impact of the expansion.


In addition to the direct costs of setting up in a new market, many other financial issues should be identified, including a reduced contribution margin, an increase in the cash tied up in inventories and trade debtors, higher debt to creditors or increased sensitivity to exchange rate movements.

Danske Navigator can calculate
your future earnings capacity,
cash flows and capital structure

Succession planning

One of the key questions relating to succession planning is the company's structure going forward. Danske Navigator can provide you with calculations of your future earnings capacity, cash flows and capital structure.

Perhaps you will also need to review those of your company's assets that do not play a vital role in operations.

If your company has more than one business area, Danske Navigator can calculate the consequences of phasing out one or more areas.

Divestments, mergers and acquisitions

If you are facing major decisions on, for example, divesting or closing down a business area, making an acquisition or being part of a merger, Danske Navigator can assist you in clarifying the financial impact.


Calculations can be made for each individual area, but Danske Navigator also allows for computing more complex and overall effects. Once you have defined the assumptions, you will be able to calculate key credit ratios and view potential consequences for your income statement, balance sheet, cash flows and other factors.