World Of Business – Book Report/Review Example
Environmental Analysis of my Computer Business This business phenomena has been going on since last year. American businesses sitting on their cashand reluctant to invest and hire in a wait and see attitude of the economy (Zarroli, 2011). As of today, the amount of money that businesses carry in their balance sheet is more than $5 billion dollars – that is 6 times more than Obama’s Stimulus Package and bigger than the GDP of Germany (Weissmann, 2012). If those money were reinvested or lent, America would have recovered from the crisis already.
The main reason why business is hoarding that kind of money because they are still doubtful about the strength of the recent economic recovery of whether it can be sustained. The doubt about the economic recovery is even more compounded with the recent development of Standard and Poors’ credit downgrade of United States from triple A credit rating to just double A. With how things are going, it is still not likely that the non-financial sector will be freeing that cash for reinvestment.
This has a direct impact on my computer business. At some point, my business will have to expand and I would be needing more capital to fund my expansion to buy new equipment, more stocks, larger store, more staff and etch. If businesses and financial institutions are reluctant to invest and lend their money, it will be very difficult if not impossible to expand operation without additional capital and I would not know where to source my additional fund requirement. I cannot force expansion without additional funds even if business brisk because that would empty if not turn my cash flow negative which could be disastrous to my computer business.
Weissmann, Jordan (2012). The $5 Trillion Stash: U.S. Corporations Money Hoard Is Bigger Than the GDP of Germany. Retrieved from http://www.theatlantic.com/business/archive/2012/07/the-5-trillion-stash-us-corporations-money-hoard-is-bigger-than-the-gdp-of-germany/260006/
Zarroli, Jim (2011). Companies Sit On Cash; Reluctant To Invest, Hire. Retrieved from http://www.npr.org/2011/08/17/139703989/companies-sit-on-cash-reluctant-to-invest-hire