The US recently subjected its EU and NAFTA partners to 25% tariffs on steel and 10% tariffs on aluminum. Likewise, the EU, Canada, and Mexico have announced that retaliatory tariffs are underway.
The US has also imposed 25% tariffs on $50 billion chinese imports through a list of more than 800 strategically important goods from China such as cars. Not long after, China announced it will retaliate with the same scale and strength. China plans to impose 25% tariffs on 659 US products ranging from soybeans to seafood.
In the next couple of weeks we will see if this impending global trade war rears its ugly head.
Political Uncertainty and Businesses
The current markets are already unsettled due to Italy´s political crisis. An impending global trade war of the world´s biggest economies certainly wouldn´t help.
The question that begs answering then is: How will your business survive all these political turbulence?
These tariffs imposed on both sides of the fence will hurt companies and communities alike. It will have significant impacts on jobs, investments, and global security.
It is during times like this that businesses must arm themselves with the necessary weapon in order to not just survive the political storms but also weather through it and come out stronger.
This is where financial forecasting and analysis comes in handy.
A financial forecast is ideally updated on a regular basis so that it continues to give your business the latest picture of what is expected to occur based on current realities.
Businesses need to make decisions on a regular basis which is why it is important to have accurate and correct understanding of the business financial condition.
Financial forecasts ensure that you will have access to the data necessary to make informed and well calculated decisions.
Perhaps the problem of most businesses today is that their financial forecasting and analysis is still done traditionally done through excel spreadsheets. The trouble with doing it in excel spreadsheets is that it is hard to understand the key drivers of the business, it is impossible to model different scenarios, and it is hard to factor in eventualities in the calculation.
While Excel is arguably one of the world´s smartest inventions of our time, it was never really meant to assist in complex financial forecasting and analysis. This is why while it works, it is met with a lot of limitations that subsequently also limits a business.
Financial Forecasting tools for Businesses
Current economic climate dictates that every business that wants to survive, grow, and succeed must have a robust financial forecast that will allow it to answer business critical questions promptly. It must have a financial forecast that can allow it to be prepared for different eventualities.
For example, in the event of an impending trade war, what are the consequences to your business? If say for example an impending hefty tariff would lower your profit by 25%, how would your business manage? Is there a need to tighten the business belt elsewhere? What about the plans for future market expansion? What happens to the business if there is 40% reduction in sales? How will your business cope if labor unions push for a 3% pay hike for the laborers?
Needless to say, financial forecasting and analysis is critical for any business not just to be able to weather through current and impending political turbulences but it is also crucial in order to chart the growth course of your business.
The best way to drastically improve your financial forecasting & analysis process is through adoption of modern technology that will allow your business to model different scenarios, do unlimited what-if analysis, do changes on the fly and just have more reliable and accurate insights.
DSPanel offers cutting edge technology platform for business analytics, planning, and visualization. DSPanel designs, builds, and operates with the end users in mind. Performance Canvas was created by DSPanel to answer the unarticulated needs of the market not addressed by previous available solutions. With Performance Canvas, information is transformed into valuable business insights for the business executives to utilize in their decision-making process. DSPanel currently has over 2500 organizations deploying their solutions.