Navigating these trying times
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INCOME STATEMENT: • Income The total size of the pie shared by the world will most probably not change that much in the medium term, but the difference will be who owns what part of that pie. Human nature has a great ability to adapt over time and the entrepreneurial spirit of some will prove to be profitable during these trying times. Hence, more effort and creativity will be required than …one thing is before. You might have to improve your skill set sure for most via formal online education, or realise that your business won’t be relevant for much longer. individuals, Invest in yourself and your business to do better businesses and with the things that will matter.
he world has seen many crises before. While each crisis is different, Ray Dalio (founder of Bridgewater Associates) reminds us that history has a tendency to teach us patterns that we can use as templates to assist us in successfully navigating through the storm.
Covid-19 has caught the world by surprise, and although there are still many unknowns, one thing is sure for most individuals, businesses and governments: it has created holes in income statements and balance sheets. An income statement is a summary of all income and expenses providing a net income after tax. The hole on income statements is mainly due to loss or uncertainty of future income. The balance sheet side is effectively the health of your total position (assets minus liabilities) at any given point.
governments: it has created holes in income statements and balance sheets.
Understanding these basic concepts provides a template on possible levers to pull:
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• Expenses This is probably where the most can be done in the short term. All of us are reminded again about what is critical and what is not, and all of us should be determined to optimise where we can.
Cutting expenses is a bit of a double-edged sword, as the micro actions that we will be required to take will have a macro impact (on the overall economy). One person’s
