With tension between economic improvements in the U.S. and shakier economies in Asia and Europe, uncertainty over corporate earnings continues but is levelling off, according to corporate treasury and finance executives surveyed in a 2015 AFP Risk Survey, prepared by the Association for Financial Professionals (AFP) in conjunction with Oliver Wyman.
Looking ahead, the top ranked risks to corporate earnings in the next three years are political/regulatory uncertainty, tougher competition and customer satisfaction/retention. In response to these challenges, companies are adjusting product lines, extending supply chain partnerships and increasing capital expenditures.
One key area of threat also identified in this year’s survey is cyber threat. Despite high-profile cyber attacks, most treasury departments note they have no clearly documented mechanism in place to initiate a response to a cyberattack.
In today’s business environment, uncertainty and emerging threats to earnings are the new normal. Learning to adjust to new challenges with nimble and responsive risk management is critical.
