Focus Management Group: September Month in Review
Each month we will be posting an overview article that covers our recent company articles, announcements, and insights. Below is for the month of September.
Emerging Trends are Converging: How Does a Business Operate Successfully in these Uncertain Times?
No business is immune from some combination of the impact of these emerging trends:
inflationary trends, including commodity price changes,
supply chain issues, and
These trends are individually and collectively more impactful than most people and businesses have experienced for twenty or more years. This means it is time for businesses to fully embrace risk management with an eye to developing alternative plans and strategies to ensure future success.
It seems that companies are taking one of two approaches. In one approach the company puts its head in the sand, and reacts to trends as impacts occur. In the second approach, the company is proactive and works to employ best practices, analyze alternative strategies, and manage its risk profile.
What are the best practices and strategies to manage risk?
How Does a Business Survive the Supply Chain Issues of 2021?
Concerns about supply chain management are the result of an emerging trend impacting businesses today. The impacts related to supply chain management that we are seeing are tied to increased costs, labor issues (including availability and cost), and extended delivery time frames.
The supply chain impacts are resulting from several emerging trends combining to increase the shipping costs and slow down shipping times. These emerging trends are the labor shortages and resulting impacts on costs, as well as overall inflation, and specific commodity price changes such as the costs of energy. Additional supply chain disruption has occurred as a result of cyber-attacks on important infrastructure supporting the supply chain. The impact of Covid-19 related shutdowns has also materially impacted the supply chain.
How businesses respond to these supply chain disruptions is key to success. What should they do to survive?
How Does a Company Prepare for Inflation Risk?
It is nearly impossible to read or listen to news channels today without hearing about inflation and commodity price changes. While no one has the crystal ball that tells what the future holds, it is clear that all businesses will be impacted in some way by inflationary trends or commodity price changes.
There are three typical measures of inflation – the Consumer Price Index (“CPI”), the Producer Price Index (“PPI”) and the Personal Consumption Expenditure (“CPE”) Index. These measures are prepared in different ways.
This article demonstrates an example of the impact inflation has on a company’s performance, and then offers an outline of the questions each company’s management team should be answering.
In addition, it discusses what questions the lender should be asking, as well as the tools are available to the lender to better understand the health of their borrower's financial statements.