Tiding over the transition – Prepare today for the period beyond
‘Tough Economy Sends Holidays Back to the Future’, says Fox News on its website dated Dec 07, 2009. Christmas shoppers flocked to the Walmarts and Targets this weekend but failed to loosen their purse strings even as much as they had the previous year. And this is when experts are speaking cautiously of the much-awaited recovery of the economy. The National Retail Federation spokesperson, Kathy Granis, said, “We knew [consumers] would be cautious, stick to a budget.’
Having been branded as habitual spenders who do not know how to save, Americans are now becoming financially responsible and are looking for ‘deals’ that would help them buy and save. Hence, discounted prices are the shortest route to American wallets. The savvy businessman knows that he has to match this trend. He also knows this will not last long. The businessman in you is certainly looking beyond this festive season not only to the year 2010 but also to the phase beyond this economic downturn. So, how do you manage in these tumultuous times?
For the present, sustenance is the name of the game. And this should see you through till the tide has well and truly turned. So fine-tune your business. Overhaul your finances. Streamline your operating procedures. Smart maneuvers of your business will help you tide over this long spell of uncertainty. The days when you start trending towards better times are going to be challenging ones too. After all, it is not a week or a month or even a year that we are talking about. It is the entire transition phase that you have to prepare for.
Have you checked out on how your assets are performing? Are the resources and assets being adequately utilized? Get a firm grip on your overall business operations. Check out on the Efficiency Ratios. It will help you measure how well your business is utilizing its assets and receivables. This will guide you on the kind of controls you need to exercise over the assets for optimum utilization for a long haul. There is a gamut of Efficiency Ratios that should be studied in totality to get a complete picture of your business functions. This is especially so in a market-driven economy. Some of these ratios are:
Operating expenses to Average Assets ratio
Collection period ratio
Sales to inventory ratio
Assets to sales ratio
Sales to net working capital ratio
Accounts Payable to Sales Ratio
You can even measure your Management Efficiency ratios by studying the Return on Investment and Return on Equity ratios. After all, Equity is the investment of the shareholders. The results are effective indicators that can assist you in your decision-making from thereon. While you are at it, check out on your Management Team, too!
After you have studied the ratios of your company, compare it with that of your specific industry and your competition. And work your way through this maze of economic uncertainty. FINTEL is a company you may like to take assistance from on this account. Take assistance or training or consultancy. www.fintel.us is the website that you may want to visit online.
Meanwhile, keep your ears to the ground so that you do not miss out on the sound of the first footfall of recovery. That will be music for your ears!