How Inflation Impacts the Future of Businesses?
For business managers, inflation makes planning much more difficult and results become much less reliable. It is because inflation in a country adds to uncertainty about forecasting the future.
This happens especially when forecasting future sales revenue, planning workforce, deciding on pricing strategies, conducting investment appraisal or investing on the stock market. These areas all require estimations of future pricing and figuring out present values of future cash flows.
Let’s dive into details of two situations which can possibly happen in any country: low inflation and high inflation.