Inventory Capital Exposure Review
Inventory due diligence for portfolio companies
before or after a capital event.
Most inventory exposure is invisible until the capital event.
Inventory arrives at the capital event as a single number on the balance sheet. That number does not show where the capital is trapped, whether it can be recovered, or where it is heading.
RiverHouse works from data supplied by the portfolio company. No system access required. No disruption to the deal process.
The output is an executive-ready read on what the capital is actually doing: what is converting to cash, what is quietly consuming working capital, and how much is at risk right now.
It is a layer on top of the diligence and reporting already in place, reading the health of the inventory the numbers do not show.
What The Audit Examines
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Inventory position.
What is owned and on hand, and where the capital is sitting today.Rate of movement.
How the current book is actually turning, and where it lags where it should be.Productive, stuck, and dead capital.
What is earning, what has stalled, and what is effectively dead and unlikely to convert. -
Capital concentration.
Where the capital is pooled, and whether that concentration is generating return or quietly consuming working capital.Alignment to demand.
Whether inventory is distributed the way sales actually are, or capital is building where demand is not.Production against real velocity.
Whether what was produced is sized to how the product actually sells. -
Marketplace exposure.
Aged units, storage risk, and capital tied up in channel, where relevant.
Portfolio Triggers
Pre-acquisition inventory health, beyond what the financial diligence already covers
Post-acquisition 100-day operational integration
Portfolio company expanding into wholesale or national retail
Portfolio company adding Amazon as a channel
Working capital compression at a portfolio brand
Covenant review where inventory exposure creates quiet liability
Founder transition where inventory judgment leaves with the founder
From Diligence to Discipline
Capital Event Readiness | Scoped per Event
Prepares inventory position, forward commitment exposure, and governance documentation. Typical timeline: 21 days from data access to executive delivery.
The Inventory Capital Exposure Review applies in full toward this engagement when commissioned within 30 days.
Infrastructure Build | 60 to 90 Days
Installs the operating architecture the portfolio company runs on: OTB framework, demand forecast, SKU-level buy framework, commitment gate protocol, and decision review cadence.
Embedded Governance | Ongoing
Senior inventory leadership installed in the planning and commitment seat. Governs the buy. Reviews commitments against the installed framework. Develops internal team capability. Steps down as discipline holds.
If a portfolio company's inventory commitments, working capital position, or planning infrastructure need visibility before or after a capital event, let's have a conversation.