Thursday, January 26, 2023

Mario Cantalapiedra points out the first signs of lack of liquidity in companies

In economy 3 we interviewed Mario cantalapiedraAn economist with about 20 years of experience as a professor in centers like Desto Business School from o Nebrija University,

remains to be seen

-How has the Spanish economy closed the year? Was it that bad or were the forecasts too extreme?

It is difficult to predict in an environment of such uncertainty. Depending on how the war in Ukraine unfolds, as well as the imbalance between supply and demand, it is most likely that we will live with high inflation and slow growth for a few months and we could even see a quarter of negative growth. our Gross domestic product (GDP),

a complicated affair

– How should states deal with the current context of high inflation, skyrocketing energy costs, disruptions in supply chains…? Are the companies supported enough?

Since the inflationary impact for companies is mainly focused on the increase in energy prices, a subsidy mechanism for energy consumption should be established. Especially SMEs and self-employed people need more support.

They are going through tough times, haven’t recovered from multiple pandemics and are now facing problems of high inflation, high financing costs and in many cases crime.

In this sense, I consider it important to set up a payment agreement that ensures that more modestly sized companies collect their invoices within legal time limits.

– Have we reached the peak of inflation or is the situation likely to worsen in the coming months?

I am particularly concerned that underlying inflation continues to rise, which may indicate that so-called ‘second round effects’ are starting to consolidate, where companies transfer their cost increases to prices, increasing this inflation. feeds back.

work to do

– Is the lack of innovation and commitment to R+D+i still one of the main shortcomings of the business fabric in Spain?

That’s for sure. A lot remains to be done in this area, especially in the SME sector. I think companies that base their strategy solely on competing on price are going to have a tough time in the near future. Betting on quality, because it is different, implies applying technology and innovating, there is no other option.

– Do you consider the financial structure of Spanish SMEs to be weak? What advice would you give them to improve in this aspect?

Spanish SMEs are generally highly indebted and generate few reserves with which to face tough times, this is partly cultural.

I recommend betting on self-financing over an extended period of time to be less dependent on outside financiers; Also professionalizing the financial sector so that it leads to management aspects such as liquidity or budget control.


– What recommendations would you give to SMEs in order to manage their relationships with credit institutions? In your opinion, have bank-company relations improved in recent years?

Like many other things in our current economy, the relationship with banks has seen better days. In general, they have become impersonal and some of the trust that was previously present has been lost. However, financing from banks remains important, so companies must manage and nurture the relationship with them as they would with any strategic provider.

– As a specialist in innovation issues, what do you think the future of banking will be? Specifically, what is the future of bank offices in our country?

I believe we will continue to see a banking concentration process that seeks to create newer, more profitable and larger institutions as well as a firm commitment to digital transformation.

As far as bank branches are concerned, since most operations are now done through electronic banking, their number will continue to dwindle and those that remain will be converted into individual advice centers for more technical or complex customer operations.

warning signs

– What are the first signs that can alert us to the lack of liquidity in the company?

It is important to pay attention to the so-called ‘maturity period’ of the company, ie the time when the money invested in the activity is returned to the treasury on average after completing the entire production cycle.

Changes for the worse in terms of warehouses, customers or suppliers can warn of this lack of liquidity, especially when there are many of them and in a significant way. For example, an increase in the average collection period or an increase in the average collection period for customers.

– What is your opinion about the new self-employment contribution system?

I haven’t studied it in depth yet. However, I agree that the group of freelancers is very heterogeneous. The situation is not the same for a self-employed person who is a notary, pharmacist or journalist. And setting up a single system that satisfies everyone is too complicated.

In any case, there are problems, such as the tax deduction of all expenses that the self-employed actually bear or the crime they suffer, which must be addressed.

And, in complex economic times like the present, I cannot offer a reform as far-reaching as this new contribution system, which further complicates the activities of many self-employed workers who are going through tough times.

Kryptos, not so clear

Cryptocurrencies haven’t stopped gaining followers, although they are not without controversy. What is your opinion about this product?

‘Crypto’ is a product that, apparently, appears to be more accessible to the average citizen than other forms of investment, and to which “don’t invest in what you don’t understand” applies very little.

Cryptocurrencies and the technology that supports them can bring innovation and dynamism to the financial system. In particular, the technology they are based on, I think will survive, although many crypto asset projects will surely fail. As happened with the ‘dotcom’ crisis, in which many companies disappeared, but the Internet survived.

In any case, investing in cryptocurrencies should not be a leap of faith or be imbued with ideological connotations. As with any other type of investment, it is about analyzing the potential risks and returns, as well as understanding what asset is being acquired and its operating mechanism.

I think it is important to deepen a regulatory framework that provides guarantees and protections for these types of assets which is being done in Europe with the Regulation on Crypto-Asset Markets, also known as ‘MiCA Law’ Is known.

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