Question

Discuss how companies can protect themselves against major financial risks of inflation and exchange rates movement.     

Answer 1

The inflation rate in 2020 is expected to be the same as in 2019 (between 3.34 and 4.54 percent, depending on which company makes the calculations).
But companies must be careful to avoid this. This is because if companies do not take steps to avoid this, they may lose a lot. According to international analysts, inflation is rising year on year, so if companies want to save themselves from inflation, they should do the following.

1) Prepare your business to produce

Production can go a long way. If you find ways to gain more focus on employees in activities that directly lead to corporate income, your financial situation will obviously improve, making inflation less of a concern. Zenefits offers great ideas for improving employee performance, including: providing jobs, matching jobs and skills, effective communications, promotions, cutting unnecessary jobs, and adopting telecommuting.
2) Adjust your numbers

Granted, raising your prices can be harmful, and it may not be the first course you will want to take when faced with inflation, but it is always the way. If you decide that it is time to raise the price, pay attention to your competitors' prices and try not to go overboard.
3) Improve your cash flow

Improving cash flow can help reduce some of the financial pressures. Find ways to keep money flowing, such as using electronic payments, sending invoices quickly, and promptly follow up late payments on available accounts. It may not be a bad idea to look for a business line of credit especially to help manage cash flow. This alone can help to address the costs associated with inflation.
4) Look for ways technology can reduce costs

Are there any jobs that are more expensive using technology that you do not currently use? Look for ways in which automation can penetrate and make improvements. This can work to increase employee productivity by allowing jobs to be completed very quickly with a small human error room. It can also free up time for employees to get more work and help improve the main point.

5) Reduce your debt

If you can't reduce your debt, inflation is a good reason to do so. Are there any credit card debt or loans that can be repaid? Do you have high interest rates that you can cover? Reducing the amount of money you have to pay regularly can help free up money to deal with the rising costs associated with inflation.
6) Evaluate your provider's status

While the price you pay your suppliers may not depend directly on inflation in some cases, it may still be wise to regularly check your supplier's status. Keep an eye on what your competitors and suppliers have to offer and buy the best deals. It may not be possible to change suppliers if you have built meaningful relationships with each other, but chances are, you can find ways to save money in this area, even if it means negotiating with existing suppliers.

If is this useful to you then like my answer