Very often the best indicators are the least sophisticated. The UK
economy remains in a very fragile state – the clearest evidence of this can be
seen as you walk down any High Street.
The rising number and popularity of charity shops tell underscore that
many families are struggling.
The recent furore over the so called pay day loan companies (charging
interest rates in excess of 4000%) further illustrates just how near the edge
many families are.
At the same time the latest results from Marks and Spencer the favourite
chain for the over 40’s reported Pre-tax profits by 14 per cent to £564.3m over the
year to 30 March, which was its worst performance since 2005.
Data suggests there are as many as 160,000 so
called “zombie businesses” being kept
from going under by means of low interest rates and patient tax authorities.
As the knock on effects percolate back down the chain many businesses
will suffer. External factors by definition are difficult to handle but at the
same time in-house disciplines can at least provide some level of insulation.
Cash-flow will be very difficult to manage over the coming months so as
always strict governance of debtor and inventory control will provide some
measure of comfort.
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