FINANCIAL RECOVERY
The Vigilant Supplier
How M&H Supplies transformed SAR 3.4M in losses into zero defaults
by learning to see the red flags with Emdad's financial insights
The Problem: Trust Without Visibility
Major Losses
For years, M&H Supplies, a mid-sized distributor of industrial and construction materials, relied on trust and
experience to extend credit to clients. Credit terms were typically 45-60 days, and the model seemed to work
well.
Then Year 3 hit. Payments began arriving well past 90 days, and two major clients defaulted completely.
The Wake-Up Call
Payment Delays
Clients paying well past 90 days
Client Defaults
Two major clients stopped paying entirely
Cash Flow Crisis
Operating cash flow turned negative
Emergency Funding
Bank overdraft needed for payroll
"The real issue wasn't client dishonesty — it was lack of visibility into their financial health."
The Solution: Data-Driven Risk Assessment
GAME CHANGER
M&H's finance team realized both defaulting clients had clear warning signs: long Days Payable Outstanding, poor liquidity ratios, and negative cash flows. But none of this had been checked before extending credit.
Enter Emdad's Financial Intelligence
Rather than building a risk model internally, M&H adopted Emdad's platform for real-time buyer risk analysis using public and proprietary data.
Real-Time Analysis
Instant financial health assessment
Automated Screening
Six key risk metrics monitored
Industry Benchmarks
Compare against sector norms
Risk-Based Decisions
Data-driven credit terms
| Metric | Risk Indicator | M&H Threshold |
|---|---|---|
| Days Payable Outstanding | Slow or stressed pay cycles | > 90 Days — High Risk |
| Cash Flow from Operations | Ability to pay vendors | Negative — High Risk |
| Current Ratio | Short term liquidity | 1.0–1.5 — Caution |
| Quick Ratio | Near obligations without inventory | < 1.0 — Caution |
| Net Profit Margin | Business viability and buffer | > 5% — Strong |
| Interest Coverage Ratio | Ability to service debt | > 3.0x — Strong |
The Results: Complete Financial Turnaround
ZERO DEFAULTS
By integrating Emdad's financial risk insights into its credit process, M&H completely transformed its working capital position and eliminated future losses.
Then Year 3 hit. Payments began arriving well past 90 days, and two major clients defaulted completely.
Year 4 Impact
— CFO, M&H Supplies
Key Takeaways: From Trust to Data-Driven Decisions
Visibility is Everything
Financial health indicators reveal hidden risks
Data Drives Decisions
Objective metrics replace subjective trust
Prevention Beats Recovery
Proactive screening eliminates bad debt
Cash Flow Protection
Smart credit terms preserve working capital
"Suppliers must move from trust-based credit decisions to data-driven risk management."
Ready to Protect Your Cash Flow?
Transform your credit decisions from trust-based guesswork to data-driven confidence with Emdad's financial intelligence platform.
