By Keiter CPAs
Challenge and Opportunity
A national construction equipment company wanted to develop a predictive model that could increase the company’s profitability through equipment leasing, the executive had a hunch there was a better way.
Approach
- At times, the company was not using all its construction equipment due to jobs ending early or Location constraints.
- It wanted to develop a predictive model that outlined exactly when equipment was not being used so that it could lease it to other companies between jobs. They also wanted to update short-term pricing based on if they were going to be leasing it in a high demand time.
- The leasing model was a way to drive additional revenue for the company.
- Using Python, the team built a comprehensive model that outlined exactly when equipment would be out of use and potential leasing terms for that equipment.
Results
The model successfully predicted when construction equipment would not be needed and pricing/timing schedules for leases from other companies. This became a significant revenue driver for the company.
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About the Author
Keiter CPAs
Keiter CPAs is a certified public accounting firm serving the audit, tax, accounting and consulting needs of businesses and their owners located in Richmond and across Virginia. We focus on serving emerging growth businesses and companies in the financial services, construction, real estate, manufacturing, retail & distribution industries and nonprofits. We also provide business valuations and forensic accounting services, family office services, and inbound international services.
More Insights from Keiter CPAsThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
