The Economy

Battling the Slow-Growth Blues

Professor Tom Conine discusses the challenges of operating a business during a time of low economic growth and how to respond.
David McCannJune 26, 2015
Battling the Slow-Growth Blues

In Part 2 of a video chat with Tom Conine (see Part 1 here), the Fairfield University finance professor discusses the financial havoc that being in a slow-growth environment can cause, compromising everything from cash generation to credit lines, price-to-earnings ratio, shareholder return, and working capital.

Conine, also president of financial-training firm TRI Corp., suggested when we shot the video in March that economic growth, which hasn’t been gangbusters for years, could slow down even more.

Indeed, the Commerce Department reported this week that the economy actually contracted by 0.2% in the first quarter, although some observers had been predicting the quarterly results would be even worse.

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To mitigate the effect of slow growth, Conine recommends setting realistic budgets, planning and forecasting with a cross-functional team, focus on what you can control, and perform before-the-fact variance analysis.