Advice for CEOs

When emerging mid-market companies need to raise growth capital, attract an M&A or private equity deal; their current cash flow will be closely scrutinized as an indicator of their potential to generate future returns. At this critical point in their evolution, many companies scramble to make improvements to their gross margin percentage. They see even small improvements in gross margin as a step toward impressing investors or acquirers as to their potential to build leverage and generate future profits.