Will the New York Giants’ upset victory in Super Bowl XLII turn our bear market around?
Theoretically, yes, based on the Super Bowl Indicator, which says a Super Bowl victory by the NFC representatives (i.e. the Giants) will result in a bull market, while an AFC victory will bring a bear market. The Indicator reportedly is accurate 85 percent of the time.
The fact that the Giants pulled off such an upset gives me hope that we will successfully upset our current economic trends and avoid a downturn.
But just in case, I thought these tips from a recent edition of the Hackett Group’s Executive Insight are on point and worth thinking about. A tough economy is a good opportunity for CPAs to earn our keep and show our value as CFOs and (if we’re in practice) to our clients. Here are my top three tips to beat a recession:
- Free up cash: This is the time to get serious about managing your cashflow. Balance sheet management techniques like receivables collections, improved billing methods, payables management and working on your inventory turns are worth tuning up now. Consolidating your supply chain and managing your supply relationships can add to your cash flow. Given the current credit crunch, cash is still king!
- Invest in projects that generate savings or lower your cost structure: ERP systems and modules that specifically address general and administrative cost efficiencies or savings should be moved up on the priority list. Anything that can be done to lower costs structures should be considered.
- Invest in projects that generate revenue or provide competitive advantage with the cash generated from steps 1 and 2: I call this an innovation-and-growth imperative. As financial professionals, we must help our organizations find new ways to innovate and grow. In fact, that is the primary focus of our Maryland Business and Accounting Exposition, to be held on June 17-18 at the Baltimore Convention Center. Don’t miss our exciting opening keynote by bestselling business author Jim Swartz, who wrote Seeing David in the Stone.
For a copy of Hackett’s full report, click here.
For analyzing your balance sheet and managing cashflow, I recommend looking at our Integral Operations Finance Toolkit, which includes the Financial Scoreboard Excel templates and some coaching sessions to get you started on one of the most effective tools I have seen for engaging your operations team in helping you manage your balance sheet.
More resources and links:
- Top five disciplines to achieve double-digit growth
- Twelve steps to find and seize opportunities
- Maryland Business and Accounting Exposition, June 17-18 at the Baltimore Convention Center
So what do you think about the state of our economy — bull (Giants) or bear (Patriots)?