[MUSIC] And now we said, okay now that we have a good diagnosis, let's go on to the action plan. What can we do to solve this problem? And we say, well, very simple, right? You have NFO growing too fast, working capital growing too slow. So, we either have to work on the NFO or work on the working capital, right? And we say, okay, let's try to do an action plan. First the action plan, when we start tweaking the things within the NFO, working capital, we have to make sure that this action plan is realistic. Something feasible. You cannot suggest something that is completely unrealistic, like reducing the number of days of collection to zero or ten. Then, it has to be effective, so it has to solve the problem. We cannot start touching things and at the end of the day, not solving the problem, and then it has to be low cost. It has to be efficient, which means low cost. The cost associated to the action plan has to be controlled. And we said, okay, let's touch things in the NFO, can we do that? And when we thought, okay, you could reduce a little bit of receivables but that wouldn't completely solve the problem. Now, you can change a little inventory, that wouldn't solve the problem. And then the payments, they were angry and that wouldn't stop the problem. Then we touch things on the working capital, if you remember, and we said, can we increase long-term debt? And then we said, well, the bank would ask for collateral and we don't have collateral. So no loan today. And then even if the bank were to give us that, then the shift would be parallel which means, there no change in the slope so we were just postponing the problem. There was no much to say about fix assets because fix asses were not changing that much. And then finally, we said we can change equity, difficult to get new shareholders and again, the change in the curve would not be changing as slow but they would shift that is parallel. So, we saw that it's difficult like, summarize it, it was difficult to touch both NFO and working capital. So then what can we do, we said, wait a second, which is we can work on the P&L. Which kind of phase can we work on the P&L? Basically, you work on the margin or you work on the OPEX. OPEX we said, we have reached it, like efficiency is difficult to push in town more. Second, we said okay, you can increase prices. And we said, okay, how much are you going to increase prices? I don't know, we said 10% is too much, but then 2 or 3% would actually increase the ROS, would increase the profitability, and would be much better. We talked briefly about the sustainable growth. What happens with this company is that it's growing too much. So the growth of the company can't sustain with its own profitability, it's just 9.3%. And they intend to grow at 25% which is way too much. So if the company does nothing, the company is going to keep needing credit. Now, what can the company do? Well, increase prices, as we said, and that's going to have two effects. One, is the sustainable growth will increase. Seeing the formula, if we increase prices, ROS is going to increase, so the sustainable growth is going to go up. On the other hand, if we increase prices, we might lose some customers, and those customers are going to leave. And then instead of growing at 25%, which is what we expected, we might be able to grow a little lower. So we're pushing up sustainable growth, and pushing down real growth until they sort of get to the same level. And with this, we're done with a brief recap of last week. And now, we're going to turn into understand a sensitivity analysis of what can happen in Polypanel, if things change. [MUSIC]
