What sort of difficulty can you imagine the manager of an organization would be in if the organization did not routinely prepare cash flow forecasts and working capital analyses?
Financial life of an organization determines its future. Every business needs to manage its funds as this increases their chances of survival. Having a cash flow forecast and an analysis of the working capital helps in understanding the financial status of the organization. Cash flow forecast helps the management of a firm to know if there may arise any shortages (Kaspina, Molotov, and Kaspin, 2015). Failure to predict the flow of funds would mean a high risk to the business. For instance, a firm may run short of cash before the laid down project is completed thus leading to business failure. However, forecasting would act as an early warning to the organization. Additionally, organizational inability to predict the cash flow may result in a weak relationship between the business and its stakeholders. In a situation where the firm wants a loan, without a proper cashflow forecast, the bank may fail to grant them the credit.
The working capital analysis is as well essential in determining sufficiency and liquidity of the business. Failing to analyze the working capital may lead to business failure. For instance, there may arise needs for the firm to add more funds to its operations. The operational capital analysis will help to realize such concerns early enough. However, if the management fails to conduct a financial review, the business may not be able to have solutions to such problems when they arise. Thus, the company will in the end fail. Also, lack of analyzing the working capital means that the business is not able to identify the cash needs or where to invest in the long or short-term basis. Therefore, the organization will fail to know the basis of shifting cash. Thus, they will not be in a position to plan for their investments well leading to a delayed profit generation.
Can a business be ethical?
A business can be ethical. In fact, there is a high connection between business and ethics. Every company aims at making the life of its stakeholders better. Through ethical operations, most enterprises have achieved customer satisfaction. Additionally, the inability of an organization to conduct business ethically results in its downfall (Trevino and Nelson, 2016). For instances, trust must exist for business relationships to survive. Also, companies must behave ethically towards the society. They must ensure that their activities do not affect the nation negatively. Such actions are ethical considerations of business.
What are the goals of competitive intelligence? Is it ethical to gather competitive intelligence?
An organization which aims at earning high competency level must first understand its competitors. Learning about the competitors refer to competitive intelligence (Murphy, 2016). The primary goal of competitive intelligence is for a firm to outstand in a highly competitive market. Every corporate purposes to emerge the best in the market. Therefore, they tend to learn about their competitors to keep abreast with the new changes. Gathering information about competitors is ethical as long as it is done within the laid down rules and regulations. Competitive intelligence is necessary in a case where the company intends to perform better than the rest or even keep up with the competition. Thus, competitive intelligence is ethical for every firm.
References
Kaspina, R. G., Molotov, L. A., " Kaspin, L. E. (2015). Cash flow forecasting as an element of integrated reporting: an empirical study. Asian social science, 11(11), 89.
Murphy, C. (2016). Competitive intelligence: Gathering, Analyzing and putting it to Work. Routledge.
Trevino, L. K., " Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right. John Wiley " Sons.
