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Tuesday, November 17, 2009

Economic cycle/crisis

What the crisis means for the real economy
1. No access to funds
2. Significantly higher cost of capital
3. Weak stock markets
4. Bonus for cash
5. Reduced cash flow
6. Credit losses
7. Significant balance sheet risks
8. Bursting of the profit bubble
9. Continued volatility
10. Protectionism
11. Wave of industry consolidation
12. More government intervention
13. Re-regulation
14. Change in consumer behaviour
15. Every industry will be affected How To Deal with The Difficult Times Ahead

1.Watch your cash
2.Reduce trade credit
3.Start working capital initiatives
4.Restructure your debt
5.Develop a stress test scenario
6.Act now on cost and organisational efficiency
7.Reassess your investment program
8.Re-evaluate off-shore manufacturing
9.Adapt product portfolio
10.Look for out of the box pricing
11.Divest non-core businesses
12.Engage in selective M&A
13.Manage financial policies and investor messaging
14.Look for opportunities
15.Install a crisis monitoring team
16.Plan for the upturn
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