Evaluate your client company’s contingency plan

Read your client company’s response, see whether it is consistent with lessons we learned in chapter seven and whether you can improve it by applying this week’s lessons. Elaborate at least in 200 words and cite the lessons from the Best Practices 7 assignment.

Business response to the questionnaire

Graponne

Question Response from the company
Please, discuss your contingency plan for dealing with recession, if you have one.

Our contingency plan include:

  1. Tighter control of our inventory levels
  2. Managing our cash. Making sure we have enough liquid reserves to get us through the downturn
  3. Limiting discretionary expenses. Including delaying intensive capital type projects.
  4. Keeping our team members fully engaged
  5. Making sure we have available credit (to finance cars that are not selling as well as lines to draw down for working capital). 

Bank of New Hampshire

Question 
            | Response from the company                                                    |

+====================================================================================+=====================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================================+ | Please, discuss your contingency plan for dealing with recession, if you have one. | As previously mentioned, we build loan loss reserves and carefully monitor for signs of economic stress that may impact our business. We have sources of emergency liquidity available, and other similar tools to ensure the viability of the bank through a very severe downturn. Furthermore, we stress test our loan portfolios and entire balance sheet to determine how the bank would perform in various economic scenarios. This allows us to determine is additional reserves, liquidity, etc. are needed. |

In their response, Bank of New Hampshire appear to have an overall good plan for dealing with any future recessions. They gave a good and short well-informed answer. Though I felt it was a bit lacking when it came to more in depth details about each step when preparing and going in to a recession.

They have good indicators to inform them for potential recessions and just the overall status of the market. They have tools prepared for the business in case of a recession and to ensure viability of the bank in very severe downturns. They also perform multiple test to their portfolios and their entire balance sheet to ensure that they are all up to date in performance. I also thinks it is good how this testing of their assets allow them to inquire more information about their reserves, liquidity, etc. and it also allows them to see if there is any need for them to add more to them.

If I would like them to add something more to their answer/plan, then it would be a more in depth step-by-step for different levels of the recession. Since they show that they are prepared for an recession by their answer I would like to see their version of the “easy-, moderate-, and survival steps.

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Comptus

Question Response from the company
Please, discuss your contingency plan for dealing with recession, if you have one. We do not have a contingency plan for an extended recession.