Client Name

Continental Biscuits Limited

Faculty Advisor

Dr. Azima Khan

SBS Thought Leadership Areas

Entrepreneurship and Innovation

SBS Thought Leadership Area Justification

Our project aligns with two of the four SBS Thought Leadership areas, primarily with Investment Decision Making and secondarily with Entrepreneurship and Innovation.

Our project aligns most closely with the Investment Decision Making area because it examines working capital as a strategic investment decision rather than simply an operational requirement. The funds tied up in inventory and receivables represent capital that could otherwise be invested elsewhere in the business, making decisions around working capital just as important as decisions involving fixed assets or major projects. To support better decision-making at Continental Biscuits Limited (CBL), we developed a data-driven framework that relies on statistical analysis rather than assumptions. For example, our regression analysis of Sales and COGS over a 24-month period produced an R² of 0.989, providing a reliable basis for forecasting costs. We also found that inventory levels were influenced more by procurement patterns than actual consumption, a finding that became clear when time trends were incorporated into the analysis. In addition, our results showed a clear seasonal cash-flow challenge, with negative net cash flows occurring significantly more often between December and March. By identifying these patterns, the project highlights opportunities to release substantial working capital through improved procurement timing and inventory planning, ultimately supporting more informed financial decision-making.

The project also relates to Entrepreneurship and Innovation through its practical use of simple, low-cost technology to improve decision-making within an established manufacturing business. Instead of proposing a complex software solution or ERP integration, we designed an interactive Excel-based dashboard that allows managers to test different sales, procurement, and working-capital scenarios in real time. The dashboard consists of ten interconnected worksheets, and a forecasting engine that projects future cash flows based on operational assumptions. This approach demonstrates how relatively simple analytical tools can create meaningful business value when designed around specific organisational needs. By providing an accessible and adaptable decision-support system, the project offers a practical example of innovation that can be replicated by other Pakistani manufacturing firms facing similar working-capital and cash-flow management challenges.

Aligned SDGs

GOAL 9: Industry, Innovation and Infrastructure

Aligned SDGs Justification

Our project aligns naturally with three of the seventeen Sustainable Development Goals: SDG 9, SDG 12 and SDG 8, through specific, concrete contributions rather than through aspirational framing. Working capital management is at first glance a purely financial discipline, but the way it is practiced at scale in an FMCG manufacturer like Continental Biscuits Limited (CBL) has measurable industrial, environmental and social dimensions.

Our project aligns with SDG 9 by demonstrating how affordable digital tools can improve decision-making in manufacturing firms. We developed an interactive Excel-based dashboard that enables Continental Biscuits Limited (CBL) to forecast cash flows, manage working capital, and test different operational scenarios without requiring ERP integration or expensive software. This is particularly relevant for many Pakistani manufacturers that rely on historical reports rather than forward-looking planning tools. By using statistical techniques such as correlation and regression analysis to validate model assumptions, the dashboard provides an evidence-based approach to working-capital management. Beyond CBL, the methodology can be easily replicated by other FMCG firms facing similar challenges, making it a practical example of how small-scale technological improvements can enhance industrial efficiency and support sustainable industrial development.

Our project supports SDG 12 by promoting more efficient use of resources through improved inventory management. The analysis showed that inventory levels at CBL are driven more by procurement decisions than actual consumption, resulting in periods of excess stock accumulation. This increases the risk of obsolete inventory, expired finished goods, and unused packaging materials, leading to both financial losses and material waste. To address this, we developed an inventory-monitoring framework that provides greater visibility across different inventory categories and helps identify stock that may be approaching obsolescence. By enabling better procurement planning and inventory control, the project can reduce waste, improve resource efficiency, and encourage more sustainable production practices over time.

Our project supports SDG 8 by improving the stability and efficiency of cash-flow management within CBL's supply chain. As a large FMCG manufacturer, CBL works with numerous suppliers, distributors, and business partners whose operations depend on predictable orders and timely payments. Volatility in working capital can create uncertainty across this network and affect overall business productivity. Rather than improving cash flows by extending supplier payment terms or reducing distributor credit, our recommendations focus on internal improvements such as better procurement timing and inventory planning. This approach allows CBL to strengthen its cash position without shifting financial pressure onto smaller supply-chain partners. By promoting more stable operations and sustainable growth, the project contributes to the broader objectives of SDG 8.

NDA

Yes

Abstract

The working capital and cash flow efficiency of Continental Biscuits Limited (CBL), a prominent fast-moving consumer goods (FMCG) producer in Pakistan that makes biscuits under the LU, OREO, and Cadbury brands, is examined in this experiential learning project. The study was assisted with three deliverables: a collection of practical suggestions for managing liquidity, a dynamic forecasting tool based on the cash conversion cycle, and a diagnostic of CBL's working capital cycle, including its seasonality. A mixed-method framework comprising ratio analysis, lag based cash-flow modelling, consumption-based inventory decomposition, statistical validation of model parameters through correlation and regression analysis, and a scenario-driven sensitivity engine was used to analyze twenty-four months of monthly financial data from January 2024 to December 2025. The diagnostic shows that CBL is not limited by its receivables: Days Sales Outstanding is close to 4 to 5 days, indicating a near cash sales structure that is statistically supported (Sales to Receivables r = +0.446, p = 0.029). With Days Inventory Outstanding varying from 35 to 80 days across the period and clustering around 65 days on average, inventory is the primary cause of working-capital strain. The contemporaneous correlation between COGS and inventory is nearly zero (r = +0.136, ns), according to key statistical discoveries. However, adding a temporal trend raises R-squared to 0.86, indicating that inventory at CBL is driven by procurement rather than consumption. The material head breakdown of the inventory reveals a concentrated procurement profile, with imported cocoa powder and other imported raw materials causing the most noticeable timing dislocations, despite their smaller absolute share. Fat, packaging materials, and flour together account for about 65% of total consumption. A statistically significant decline in operational cash flow occurs from December to March due to the year-end bulk import of cocoa powder and the hedge-driven bulk procurement of sugar (t = −2.56, p = 0.018; 62 percent of December-March months show negative net cash flow versus 6 percent of April November months, Fisher exact p = 0.007). The forecasting tool created for this project uses a lag based net-cash-flow model in place of an earlier balance-sheet-based projection. It takes quarterly sales budgets from the user and displays monthly receivables, payables, per-material inventory, stores and spares, and lag-based cash flow live on an interactive dashboard. Aligning the procurement calendar with the cash calendar, expanding the framework to include work-in process, finished goods, stores, and spares once data are available, and using the dashboard as a quarterly planning tool instead of an end-of-period reporting one are the main recommendations.

Keywords: working capital, cash conversion cycle, lag-based cash flow, inventory bifurcation, correlation analysis, regression analysis, FMCG, procurement timing, scenario analysis, Continental Biscuits Limited.

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

Notes

Due to confidentiality obligations under a Non-Disclosure Agreement (NDA) signed with the client organization, certain project deliverables (including dashboards, datasets, presentation and proprietary materials) have not been included in this submission. The submitted report contains all information that can be shared while remaining compliant with the NDA and client data protection requirements.

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Available for download on Friday, June 09, 2028

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