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Focus Management Group: June Month in Review

Each month we post an overview article that covers our recent company articles, announcements, and insights. Below is for the month of June.

Focus Management Group - labor

What Does a Hamburger Teach us about Inflation and World Economics?

The humble hamburger helps explain the issues that businesses, their lenders, their investors, and their professionals need to understand to maintain or improve financial performance of a business.

Based on the April CPI, the differences between increased food at home costs versus increased food away from home costs, tells us we should be expected to see further increases in food away from home. Consumers are seeing their purchasing power reduced due to inflation, which in turn pressures businesses to increase labor rates to retain needed employees.

This further increases the cost to produce the products, which reduces financial performance and further drives the cycle of price increases.

Take a look at the full breakdown below.

Focus Management Group - food inflation

Tom Thompson Joins Focus Management Group

Focus Management Group has enhanced its team with the addition of Thomas Thompson. Based out of the firm’s California office, Tom will serve as a Senior Managing Director to complement the firm’s growing demand for its turnaround management and corporate restructuring services.

“We are excited to have someone with Tom’s ability and expertise,” said J. Tim Pruban, CEO and Founder of Focus Management Group, continuing “Tom’s proficiency in a wide range of industries will be a valuable resource in supporting our firm’s steady growth in providing restructuring solutions to financially distressed businesses and their stakeholders. With his industry experience, he will be a hands-on team member for our clients.”

Read the full announcement below.

Focus Management Group - auto vehicle market

What Tools Can be Used to Analyze Income Statements with the CPI at 8.6% and the PPI at 10.8%?

With inflation at its highest level in 40 years, it is important to reevaluate the financial analysis tools being used when reviewing past performance and considering opportunities for future performance and performance risk.

Businesses need these tools to adjust in real time to maintain performance levels. Lenders need these tools to evaluate the performance risk specially related to cash flow adequacy and covenant compliance for borrowers.

What can we learn from the indices?

Focus Management Group - auto vehicle market

What Does the Cost of Breakfast Tell Us About Ongoing Inflation Stresses and the Outlook for 2023?

When you consider the impact of inflation on the basic items most of us, as consumers, use on a regular basis, it is easier to translate the impact of inflation to the financial performance of a business.

A few weeks ago, we looked at the April year over year change in the price of a hamburger. Let’s now consider the impacts of inflation on a typical breakfast.

The cost of making of a breakfast sandwich and having a cup of coffee has changed significantly from May 2021 to May 2022.

Just how much has it changed? Read more below!

Focus Management Group - auto vehicle market

What Defines a Small Business? Middle-market Business? Large Business? How does a Business Survive?

While each of us have our own definition of small, middle market and large businesses, the general guidelines for a small business are based on the US SBA revenue and employee limits for eligibility for the SBA 7(a) loan program. These definitions have received additional coverage in recent years as the Payroll Protection Loan Program (“PPP”) used SBA small business definitions to establish eligibility for that government program.

Although the headwinds for businesses are strong, with inflation, labor, supply chain and commodity prices leading the way, there is also optimism in the small and middle market sectors. This is encouraging.

Lenders, business owners, accountants and consultants need to remember that the key to success for businesses is optimism coupled with attention to detail, analysis, and financial management.

Read more below!


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