Activity Exercise / Drill 2

We don’t know what happened in the next morning or in the next year. Like that we are facing now; no
one would know that this pandemic named “COVID-19” will make our life/world changed. COVID 19 has a lot
of impact in our life also in our business world. COVID-19 has and will continue to wreak enormous damage on
the world economy. Even at the start of the pandemic, no one would have foreseen how widespread this might
be on the world economy. As we move towards the latter part of 2020, we are still unsure how long this will
continue. The impact of the pandemic on business has been immense. Some believe that things have
permanently changed, that we are currently witnessing a seismic change that will mean the business world.

Now I will discuss how forecasting and planning will help manufacturing and services organization address
the following critical elements:

a. Cash flow
Estimating how much cash flow a business will generate is no easy task in today’s
unprecedented conditions. The covid-19 pandemic is unprecedented medically as it is financially.
Today’s, a cash flow forecast should have assumptions around the effects the pandemic will have on a
business’ current and future liquidity needs, as well as when and what a return to normal operation may
entail.
Forecasting and planning is a very important when it comes in the business because we don’t
know what happened in the future. So, forecasting and planning will helps manufacturing and services
organization in cash flow in a way of it will show you exactly the cash flow when it might run low in the
future so you can prepare. It’s always better plan ahead so you can up a line of credit or secure
additional investment so your business can survive periods of negative cash flow. Without forecasting
and planning a company’s cash flow, it would be almost impossible to estimate how much your
company will have at a given time. If you don’t forecast and plan your cash flow, it makes it almost
impossible to make informed business decisions, plan for change and know how you can enable
business growth. In short, in this time of pandemic forecasting and planning will helps a business owner
understand what their cash position is how and into the future by analyzing upcoming income and
expenses.

”Cash flow Management By: Mark S. Beasley, CPA, Ph.D., and Bruce Branson, Ph.D.”. In this article,
as we look ahead to 2021, we have a better appreciation of the fact that emerging risks can quickly disrupt
business models and strategic plans. COVID-19 has taught us that a single event can trigger a cascade of risks
affecting all aspects of an entity’s operations. The pandemic, combined with global trade tensions, ongoing
political elections, continued social unrest in some countries, and other risk drivers, has put tremendous strain
on most organizations.

Revenues that were once fairly predictable are no longer stable or even present, and organizations trying
to navigate the crisis face previously unseen costs. COVID-19 and other 2020 events have affected almost all
aspects of most organizations, making it challenging to pinpoint all potential variables that might affect cash
inflows and outflows simultaneously. In this environment, finance leaders should consider taking a number of
steps to obtain a better, more comprehensive view of organizational cash flows.

The pandemic has exposed all of us to increased uncertainty. Because of this it may be helpful to begin
analysis with a focus on the near term (six months or so) and to break down the analysis into at least the three
conditions mentioned above: “worst case,” “OK-but-not-great case,” and “reasonable, hopeful best case”
scenarios. Separate analyses of cash inflows and cash outflows on a worst-case to best-case basis can provide
management with a range of potential outcomes. The analysis may reveal periods where forecasted cash flows
are negative or are below management’s risk appetite. Proactively anticipating cash flow squeezes will lead to
better outcomes (and less stress) than waiting until the crisis is present (when some options may no longer be
available).

Identifying the available options and then organizing them by ease of implementation will provide
management a road map to use as conditions unfold. Some options may be worth pursuing now, while others
can be used as needed.

Thinking about liquidity isn’t a “one and done” activity. Keep in mind that these analyses are mere
estimates. As time passes, new facts and circumstances will arise. Assumptions used to prepare an earlier cash
flow analysis are likely to change, meaning the analyses need to be regularly revisited and adjusted. Lessons
will be learned that can be used to improve forecasting techniques.

b. Employee’s turnover
Turnover is a common occurrence throughout any given year. However, during the covid-19
pandemic, year-over-year turnover trends drastically reduced. Employee’s instead clung to their jobs as
way to maintain financial security, having seen countless others get furloughed or laid off.
Employee turnover refers to the total number of workers who leave a company over a certain
time period. It includes those who exit voluntarily as well as employees who are fired or laid off. Now
forecasting and planning will helps manufacturing and services organization in employees turnover
through it enables business or it minimize the employees turnover in a way to track the expected
workers performance one a period of time in the future. One of the causes why business become run low
it is because of employee turnover. When employees leave the organization, they represent investments
that are no longer reaping dividends. The lower your employee’s turnover rate, the lower your expenses
will be to replace existing employees. In conclusion, in time of pandemic, forecasting and planning is a
key element of your risk turnover management. Quickly defining concrete actions and anticipating the
possible developments according to different scenarios will make it easier for us to overcome the
difficulties face by our company or business.

According to the article “Employee retention: The real cost of losing an employee Written by
Gabrielle Smith”, we’ll go over why employee turnover matters, how it can hurt your organization, and
strategies to prevent it. According to the Bureau of Labor Statistics, the number of U.S. employees voluntarily
leaving their jobs has gone up in the last year, especially in industries like professional and business services,
manufacturing, and retail. Frequent voluntary turnover rates like these have a negative impact on your
organization in more ways than one. One of the first changes you’ll notice after losing an employee is a
decrease in employee morale. As more employees leave, the ones remaining may have lost a valuable work
friend, which matters more than you might think. Losing employees also leads to decreased productivity, quite
simply because you have less team members to get work done. As the remaining employees get overwhelmed
with more work to help make up the difference, their stress levels rise, making them far less likely to perform at
their best. Perhaps the biggest concern employee turnover presents is its financial costs from recruiting and
training new employees to replace the ones you’ve lost. While the exact costs of employee turnover vary,
there’s no question it’s something employers need to manage. One of the reasons the real cost of employee
turnover is such a mystery is because most organizations don’t have systems in place to track exit costs,
including recruiting, interviewing, hiring, orientation and training, lost productivity, potential customer
dissatisfaction, reduced or lost business, administrative costs, and lost expertise. This takes collaboration among
departments (HR, finance, operations, etc.), tools to measure these costs, and reporting mechanisms.