Returning Value Blog

The issue of raising the debt limit has been resolved, at least until January 2025, and we can all breathe easier now that the United States can continue to pay its debts. Hopefully, in the future, Congress will find a way to eliminate this boondoggle or at least work around it, as was done under 1979’s Gephardt Rule.

The past few years of pandemic recovery, rising inflation and interest rates, and legislative changes have created tremendous shifts and challenging obstacles within the real estate industry. As economic uncertainty applies pressure to sources of traditional capital, the industry is turning to private capital and small and regional banks while managing a decline in government funding.

Healthcare Has a Margin Erosion Problem

The past few years have significantly destabilized the healthcare industry’s financial footing. According to our 2023 Healthcare CFO Outlook Survey, 60% of healthcare CFOs could not meet the terms of their bond or loan covenants in 2022 — up from 41% in 2021.

Accrual-basis financial statements are considered by many to be the gold standard in financial reporting. But with the increasing cost and complexity of today’s accounting rules — particularly the updated lease guidance that went into effect last year — some private companies are seeking a simpler alternative to U.S. Generally Accepted Accounting Principles (GAAP). The solution for some is to switch from accrual to income tax-basis reporting.

It’s common for high-growth and seasonal businesses to have occasional shortfalls in their checking accounts. The reason relates to the cash conversion cycle — that is, it takes time to collect on customer invoices. In the meantime, employees and suppliers want to get paid. The “cash gap” is currently getting wider for many companies. A recent study by CFO / The Hackett Group shows that the cash conversion cycle increased from 35.2 days in 2021 to 36.4 days in 2022. To add insult to injury, interest rates, and many operational costs are rising.

Stakeholder demands for companies to commit to clear environmental, social, and governance (ESG) goals and targets have become commonplace.

In addition to strengthening stakeholder relationships, setting goals and targets can help companies further their corporate sustainability strategies, improve operational and financial performance, enhance credibility, and achieve other benefits.

If your profitable business has trouble making ends meet, it’s not alone. Many business owners mistakenly equate profits with cash flow, leading to shortfalls in the checking account. The truth is that there are many reasons these numbers might differ.

The U.S. government has repeatedly revised the requirements for U.S. taxpayers to claim the Employee Retention Credit ("ERC"), also commonly known as the Employee Retention Tax Credit, since its initial codification into law. As a result, many eligible taxpayers have been left uncertain as to whether they may properly claim this often-valuable tax credit. Because there is a strict statute of limitations on claiming the ERC, potentially eligible taxpayers that have not already claimed the ERC should review their eligibility under current U.S. law as soon as possible.  

Not-for-profit organizations exist to achieve nonfinancial or philanthropic goals, not to make money or build value for investors. But they still need to monitor their financial health — that is, how much funding is coming in from donations and grants and how much the organization is spending on payroll, rent, and other operating expenses.

Each company’s path toward sustainability is unique but effective environmental, social, and governance (ESG) strategies and programs have something in common — they help companies better navigate uncertainty and cultivate resiliency.