Each month we post an overview article that covers our recent company articles, announcements, and insights. Below is for the month of November.
Did the Pandemic and Its Aftermath Provide New Red Flags for Lenders?
Experienced lenders have a listing of red flags, or indicators of risk, when evaluating borrowers. Some lenders keep a list taped to their desk or on the computer desktop.
Typical red flags include late delivery of financial information, turnover in the accounting and finance leadership roles, slow down in collection of AR, etc. Each lender has their own list of risk indicators that was developed based on their experience and training.
Now that it is 2.5 years past the Covid-19 lockdowns, are there new red flags to add to the list?
Our experience says yes, there are two red flags to consider...
Shortages: What Areas Should We Be Concerned About?
One thing the last three years has taught businesses is that they need to be prepared to manage through supply chain issues effectively. We have seen supply chains be impacted by plant shutdowns for Covid, labor shortages or labor mismatches, increased cost to ship by both truck and container ships, slowdowns in ports, political unrest, drought, excessive heat, unexpected frost, etc. Essentially every part of our economy has been impacted at times by one or more of these factors.
Looking at the fourth quarter of 2022 and the beginning of 2023, there are a few products that seem to be showing increased supply chain risks, and businesses and consumers need to be prepared for possible shortages.
In this article, we examine potential shortages related to food, medicines, and diesel.
What is Concerning Retailers Right Now?
This data seems to indicate consumers are still buying and are taking advantage of retailers’ needs to reduce investment in inventory. But consumer spending is not keeping pace with inflation. These factors are concerning to retailers because many are experiencing stuffed supply chains, incorrect product mix, and rising purchase prices for salable goods.
The fact that consumers are not increasing spending as much as inflation is increasing, and many retailers have increased their discounts and extended the discount periods, means the financial performance of retailers will be tricky for Q4 2022 and into 2023.
Looking at stores opening and closing by year, the pandemic shut down year was the worst for retail store closures with 12,200 reported closures. But it is interesting to look at demographic trends and their impact on retail locations.
How do these trends impact stores...?