Category: Blog

Chart of Household Debt Compared to Corporate Debt from January 1990 to January 2020

This chart shows household debt and corporate debt as a percentage of GDP. Households take on debt for various reasons, such as, purchasing a house, buying a car and paying for education.  Corporations take on debt for various reasons too, such as, capital improvement, stock buy backs and to build up seasonal inventory.  Household debt…
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A Simple Way to Get Reacquainted with the Business

Recently, I have been having conversations with clients on how they need to get back in touch with what is going on with and in their business.  Below is a simple methodology on how to get back in touch. Sign all the checks the business issues! Yes, it is that simple.  Sign the business’s checks…
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Weekly Economic Index (Lewis-Mertens-Stock) May 2008 to May 2020

The WEI is an index of real economic activity using timely and relevant high-frequency data. It represents the common component of ten different daily and weekly series covering consumer behavior, the labor market, and production. The WEI is a composite of 10 weekly economic indicators: Redbook same-store sales, Rasmussen Consumer Index, new claims for unemployment…
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Strategies for Budgeting and Forecasting Due to Extraordinary Events

At any point in time during a year a business may need to revise their annual budget or forecasting models and processes. The Differences Between Budgeting and Forecasting Budgeting is a planning process that is done on an annual basis to help the executive management team define what they want the business to achieve during…
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Map of Commercial Banks by State as of Q4 2019

A commercial bank is where most people do their banking.  Commercial banks are financial institutions, which include depository trust companies, credit card companies with commercial bank charters, private banks, development banks, limited charter banks, and foreign banks.  A commercial bank accepts deposits, offers checking account services, makes various loans, and offers basic financial products like…
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Avoiding a Liquidity Crisis from Becoming a Solvency Problem

Any size and type of business can have a liquidity crisis. Liquidity can be defined as the ability of a business to pay their current financial obligations, which requires converting assets, such as, accounts receivable, inventory or services provided into cash as quickly as possible.  Cash is the most liquid of all assets and is…
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Map of Median Household Income by State for 2018

The U.S. Census Bureau provides annual estimates of income.  Household income includes income of the householder and all other people 15 years and older in the household, whether or not they are related to the householder. Median is the point that divides the household income distributions into two halves: one-half with income above the median…
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Why Management Wants the Turnaround Person Gone as Quickly as Possible

In the course of my career I have done more turnarounds than I want to remember.  Over the years, I have learned that most turnarounds follow a similar pattern. First – Business management or owner(s) are questioning why the turnaround person is even needed to begin with.  It appears that no one thinks there is…
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Chart of 4-Week Moving Average of Initial Jobless Claims from January 28, 1967 to January 25, 2020

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. Week to week initial jobless claims may be very volatile, so the four-week moving average attempts to smooth out the weekly data used for the initial jobless claims. The largest increases in initial claims…
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Everyone Hates Annual Performance Reviews – Stop Doing Them

Manager’s hate writing and delivering annual performance reviews.  Employees hate doing self-appraisals and the dreaded annual review meeting.  Why?  For one, this might be the only formal feedback an employee receives all year.  There’s a lot riding on it.  Raises are often tied to the overall rating which adds to the pressure.  Even for employees…
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