Private firms see inflation as the top risk

BVWireIssue #260-3
May 15, 2024

valuation methods & approaches
risk analysis, economic conditions, cybersecurity

Over three-quarters (78%) of private companies see inflation as the most concerning business threat, according to the “Private Company Performance Report” from CitrinCooperman. The firm polled 1,000 senior leaders of privately held companies spanning industry sectors across the U.S.

After inflation, the most concerning threats to private-company leaders are supply-chain disruption, cyber threats, and cost of capital. A third of companies have experienced a cyber incident or breach in the past 24 months, the report says. To access the report, click here.

When analyzing how sensitive a company is to inflation, a “back to basics” approach can be used. For example, can the company pass inflation on to customers, and to what extent? Also, examine the impact to margins, investment efficiency, cost of equity, cost of debt, and the probability that inflation may cause the company to fail to a certain degree (go out of business entirely).

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