Capital strength - Deepstash

Bite-sized knowledge

to upgrade

your career

Ideas from books, articles & podcasts.

Capital strength

Finance has its own heuristics in a time of uncertainty.

  • Commercial organizations are often slow to react to changes to their forecasts.
  • Working capital often increases, consuming cash and restricting liquidity.
  • Companies often become motivated sellers when asset prices are low.

Companies should use data and information technologies to regularly run scenarios to review and challenge economic, business, and sales projections.

STASHED IN:

141

MORE IDEAS FROM THE SAME ARTICLE

If organizations can stop being so defensive and assume a more aggressive stance, they have a better chance of maintaining their balance and shaping their future.
It will take a lot of courage, but companies should consciously lean into changes and counterintuitive activities when it is least ...

During periods of heightened uncertainty, leaders reflexively reduce investment, stop hiring, slash marketing, refrain from entering new markets, or stop making decisions.

When the environment is highly uncertain, a strategy has to be:

Organizations should be inclined toward action. As a baseline, companies must strive to be fit for growth. This can be done by aligning costs with priorities and strategy, investing in varied capabilities, and using traditional and digital levers to execute.

Uncertainty tends to paralyze deal-making or push companies into transactions that are defensive and reactive.
In evaluating deal opportunities, companies that are reasonably agile to execute transactions when they have to will find that deals present occasions to boost growth...

Companies can act on the options they create only if their operations can support the execution.
It means understanding which operations and capabilities give a competitive advantage, and ensure the company owns them and invests in them.

Many organizations have found that volatile shifts in tax and regulation impact their industry, their specific markets and the general environment for business.

In times of uncertainty, if companies reduce headcount and leave positions open, they can miss out on filling critical needs and areas.

Uncertainty is always there. The degree of uncertainty can rise and fall.

25 Reactions

Comment

It's time to

READ

LIKE

A PRO!

Jump-start your

reading habits

, gather your

knowledge

,

remember what you read

and stay ahead of the crowd!

Takes just 5 minutes a day.


TRY THE DEEPSTASH APP

+2M Installs

4.7 App Score