Dr. Al Bates
President, Profit Planning Group
“So this EASA member walks into a bank and asks for a loan.” Well, there’s no need to wait for the punch line as it is no laughing matter. In many cases, the credit available to members has all but dried up. Where money is available, banking requirements are becoming more restrictive almost every day. The likelihood of things getting better any time soon is remote.
With enough patience and concerted effort, the cash challenge associated with disappearing lines of credit can be overcome by rethinking gross margin and expense levels even during a recession. In fact, this will be the topic of the next Profit Improvement Report. However, many distributors need cash now, not in six months. The conclusion is that inventory and accounts receivable reductions are in order.
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