Review of Financial Projections for HVAC and Plumbing Company

This case study examines the evaluation of financial projections for a residential HVAC and plumbing company that experienced a significant reduction in workforce, resulting in underperformance against budget targets. Cherry Bekaert was engaged to assess the reasonableness of the company's forward-looking financials following a 20% reduction in revenue-generating employees. The study outlines the steps taken by Cherry Bekaert, including reviewing historical performance, understanding macroeconomic factors, and analyzing key assumptions. The findings revealed that the company's key performance indicators (KPIs) were only partially defined, leading to challenges in accurately assessing financial health. Cherry Bekaert identified gaps in the company's revenue projections, which were based on demand forecasts that did not account for the necessary supply. The case study concludes with recommendations for improving data tracking and KPI definitions to support better financial forecasting and decision-making.