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The lack of access to stable, predictable cashflows is the hard-to-see source of much of today’s economic insecurity. Financial Diaries (USFD), an unprecedented study to collect detailed cashflow data for U.S. And employers and government do less to buffer individual families from the resulting ups and downs.
Economies of scope exist where a firm can produce two products at a lower per unit cost than would be possible if it produced only the one. With the Euro-zone at the brink of collapse, governments and business leaders may be well advised to revisit basic concepts like ‘economies of scope’. Importance. Economies of Scope.
Gross Domestic Product (GDP) growth to 5.0% There is evidence that this debt growth has become excessive and non-productive. After the massive stimulus and more than doubling of new bank loans in 2009, the government attempted to stabilize credit growth, but the growth of the shadow banking system exploded instead.
If they do, as many CEOs believe, this is a serious indictment of current corporate governance arrangements and has important policy implications. McKinsey has a new study out on an important topic — the question of whether corporations systematically take too short a view and do not invest enough for the long term.
Although it is fairly common for a successful business to generate 80% of its profits from 20% of its products, relying heavily on a small number of products, services, or markets exposes a business to significant risk. Diversify Revenue Streams One fundamental strategy for business resilience is to diversify revenue streams.
But one other big factor has been hiding in plain sight: The efforts of corporate-governance activists and proxy advisers, empowered by the “Say on Pay” votes mandated by Dodd-Frank reforms, to stress transparency and pay for performance. One milestone might include completion of prototype-level next-generation digital products.
If you don't manage your cashflow, a lack of cash will kill your business. And, because I needed the signoffs as part of our governance, I wasted a day getting people to sign. Ask these questions about your current policies: How much value does this policy add to the products and services we sell?
get a State Tax ID number from your state’s government website. Avoid a full-time or long-term lease so you can keep your expenses as low as possible, especially in the beginning when cashflow will be tighter. I recommend this summary on Forbes.com: 20 of the Best Time Tracking Tools to Increase Your Productivity.
In the latest sign, housing starts plummeted 25 percent in April from a year ago, the Chinese government announced on Tuesday. Economic data released on Tuesday also included a deceleration in industrial production, with growth in steel and cement output slowing to a crawl.
But there has been a shift in how these entities are governed, one that has gone unnoticed in the outcry over executive pay packages, tax inversions, offshoring, and other controversies. They mean that I can have the rights to the cashflows from a company’s shares without owning the share itself.
While companies are required to share the same materials with all investors, they can emphasize the elements that will be most relevant to particular investor segments—highlighting stable cashflow for pension funds or payouts for growth-oriented investors, for example. The number of directors and officers would be reduced.
Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cashflow drain from years of problematic acquisitions, divestitures, and buybacks. Because of these dubious decisions, GE’s ratio of debt to earnings has soared from 1.5 in 2013 to 3.7
” The UK Government is launching an inquiry into buybacks , due to concerns that they “may be crowding out the allocation of surplus capital to productive investment.” A comprehensive survey of financial executives concluded that “repurchases are made out of the residual cashflow after investment spending.”
First, small businesses tend to be more productive than larger ones and may be especially unlikely to invest in risk management that diverts resources from production. In essence, the fortunate firms took on more debt, committing the business to a stream of cashflows and expenses far into the future to pay for their losses.
We have a government with annual deficits of $1 trillion and with a lot more “off the books” because there are non-budget items. But this is not about GE but rather about accounting irregularities in general.
Disruptions in the supply chain may affect production processes that depend on unpriced natural capital assets such as biodiversity, groundwater, clean air, and climate. These unpriced natural capital costs are generally internalized until events like floods or droughts cause disruption to production processes or commodity price fluctuation.
And isn’t the focus on quarterly results a natural outgrowth of the rigorous corporate governance that keeps executives accountable? Our belief is that the earnings of long-term companies will rely less on accounting decisions and more on underlying cashflow than other companies.
It is not just the purview of finance to interpret the numbers that govern profit and loss; it behooves every employee to understand how and why the company makes money, spends money, and measures financial performance. Cashflow. A Lack of Business Acumen Exists. Where to Start. Operating income. Operating Expenses.
Government debt-to-GDP ratios have risen further; in several cases, they appear to be on an unsustainable path. It could represent a hidden vulnerability, especially if backed by domestic currency cashflows derived from overextended sectors, such as property, or used for carry trades or other forms of speculative position-taking.
government. If you greatly reduce the production volume, the cars that do come out have to absorb more of the fixed costs, and that eventually sends the product into a profitability death spiral. The tragedy in America is that there is no consensus among leaders in business and government.
Even my hometown can’t get our products right , Cameron thought as he chased Graham over to the playground. The innovative system promised to reduce local governments’ energy consumption and maintenance costs and improve their constituent relationships. “Higher!” ” Graham shouted. “Good idea.
Technology combined with data is a matter of life and death for professional services firms where the “product” is a combination of insights and expertise. It prevents you from generating reliable cash-flow forecasts and makes it incredibly difficult to manage resources. Are compliance/governance rules working?
What Has Government Done to Our Money? So refraining from any forecast of what will happen in the near term, it’s sufficient to observe that the economic data is not nearly as strong as widely perceived, and the impact of QE on stock prices does nothing to improve the underlying cashflows. Home Builders.
Government Bonds: I'm not a big lender of money to governments period. I think that the strong dollar is having enormous production on US production and US businesses. What tools does the Fed or the US government have to help us out of it? Number three there's an existing cashflow. How bad is it?
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