Motor manufacturers "strengthen their balance sheets"

At a time of widespread concern in the sector, both BMW and VW have recently announced lower profits, even though there is growth in their domestic market.

Many motor manufacturers are reported to be strengthening their balance sheets during the recession. But what exactly does that mean? There are many things that most companies can do to manage their balance sheets - in essence improving liquidity and reducing the risks associated with external debt finance. Stock management, supply chain management, effective credit controls, balancing fixed and variable costs; all these are ways of improving cash flow, which in turn creates options such as paying down debt, or making wise investments for the future.

Virtually every business can make liquidity and profitability improvements, both in recession and growth years, to build a sustainable business for the future and take advantage of opportunities as they arise. These are some of the themes we explore in programmes such as our business simulation "Apples & Oranges" - which comes in variants for manufacturing, service and retail sectors. Click here for more information.