CASH PRESERVATION AND CASH FLOW MANAGEMENT

 January 5, 2021

HOW TO THRIVE IN POST- COVID ERA

Financial management in the small firm is characterized, in many different cases, by the need to confront a somewhat different set of problems and opportunities than those confronted by a large corporation.

One immediate and obvious difference is that a majority of smaller firms do not normally have the opportunity to publicly sell issues of stocks or bond s in order to raise funds. The ownermanager of a smaller firm must rely primarily on trade credit, bank financing, lease financing, and personal equity to finance the business. One, therefore, faces a much more severely restricted set of financing alternatives than those faced by the financial vice president or treasurer of a large corporation.

On the other hand, many financial problems facing the small firm are very similar to those of larger corporations. For example, the analysis required for a long-term investment decision such as the purchase of heavy machinery or the evaluation of lease-buy alternatives is essentially the same regardless of the size of the firm.

As a typical “black swan” event, COVID-19 took the world by complete surprise. As we enter April 2020, the virus has infected over 1,391,890 people, and led to more than 82,000 deaths. More importantly, more than 75 countries are now reporting positive cases of COVID-19 as the virus spreads globally, impacting communities, ecosystems, and supply chains far beyond China.

The focus of most businesses is now on protecting employees, understanding the risks to their business, and managing the supply chain disruptions caused by the efforts to contain the spread of COVID-19. The full impact of this epidemic on businesses and supply chains is still unknown.

However, one thing is certain: this event will have global economic and financial ramifications that will be felt throughout global supply chains, from raw materials to finished products. There are key steps you can take now to help ensure your organization is prepared to manage the escalation of challenges associated with COVID-19, as well as prepare for the potential economic aftermath ahead.

Guru – Mantra for recovering and returning to normal business operations
SALES IS VANITY
PROFIT IS SANITY
CASH IS THE ONLY REALITY