Dollar Pays Heavy Price for Equity Sell Off - MarketPulse

Dollar Pays Heavy Price for Equity Sell Off - MarketPulse: The US dollar was lower against most major pairs on Friday. The greenback dropped as investors flocked to safe havens away from the US currency. Trade war concerns and its impact on US companies have triggered a massive sell off in equities. The US dollar is on the back foot despite strong growth as evidenced …

Management

The weaker the cash flows, the lower is the importance of enhancing productivity to cost-of-capital improvement. Management often faces quick decisions concerning its workforce, including the growth outlook for its products and services and the various product lines within the company's markets. If the free cash flows are absent, layoffs hopefully can provide a bridge to a turnaround.

Corporate executives are initially reluctant to cut staffing levels, especially it they sense that demand will be restored within a reasonable period of time, even if current levels are obviously mismatched with output and cash flows.

The workforce and productive capital and plant can be set once current and projected operating and free cash flows are reasonably estimated; it would be imprudent to match workforce and plant with units of production or revenues if the entity is not capable of generating long-term free cash flow.