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.

Comptus

I would make a couple of recommendations for a contingency plan regarding Comptus. As a good and successful business manager I will be looking at leading economic indicators including, but not limited to unemployment rates, inflation, home sales/building, and consumer spending. Once we determine that a recession is in the near future there are a couple of steps Comptus can take. Comptus does not have an excess of employees so it may be hard to cut out a lot of expenses through lay offs, however this is also an advantage as many of the workers we will be paying are an absolute necessity. While you have no choice, but to keep paying overhead costs you can review these and make sure you’re getting the best value. Lastly, I would identify opportunities that increase capital and nail those down. A A recession doesn’t have to be all bad as you may be able to identify clear cut ways to improve productivity while cutting down on costs and spending. +————————————————————————————+————————————————————–+ | 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. | +————————————————————————————+————————————————————–+