Every year Chief Financial Officers are interviewed by a consulting firm employed by Merrill Lynch and they interview major publicly traded companies CFO's to obtain information about their outlook for the coming year. Each year this report or Outlook is published and viewed as one of most influential pieces of data that an investor can view about the overall state of publicly traded companies. Chief Financial Officers are responsible for planning capital expenditures and new product and business growth thru investing into expanding revenue resources by launching new marketing activities, products, and opening new distribution centers, plants, acquiring other companies, and for hiring or planning the budgets and other financial activities of their organization. The current 2014 CFO Outlook is more positive than any other that has been published since 2008. The most positive report since the 2007 financial crisis found the following important points thru 751 interviews with CFO's of major publicly traded companies.
94% of CFO's plan to pursue growth strategies in 2014 which will include major publicly traded companies investing in hiring new employees, purchasing existing companies, expanding marketing activities in existing and new markets both domestically and internationally, launching new products, and most importantly of all these CFO's do report that their companies do have adequate cash flow to invest in all these activities that will add growth or revenue to their organizations. A company being able to have adequate cash flow to invest in growth strategies is kind of like when a company purchases its own stock. It shows that its cash flow is stable and that the ability to invest in further growth activities is what every investor wants when they purchase stock from a company is to see it's market share and it's growth continue to grow over time. This report is so highly respected as CFO's are the one main person responsible for making decisions that will add capital to their organization as well as to shareholders who are the one's who own capital in major publicly traded companies.
They do see a positive trend of economic growth their major concerns are health care reform and the costs associated with it, the effectiveness of the government to do its job effectively by passing bills and ending bipartisan gridlock, and the deficits of the United States and other countries around the world. The requirement for small business owners to provide employees with affordable health care was pushed back to 2015. However, it is the rising healthcare costs that caused health care reform to be a necessary vital piece of regulation that will undoubtedly be changed over time as the need to get more healthy people under insurance coverage is necessary along with a need to reduce the costs of medical care to the public by reducing the amount of money spent on both uninsured patients who file bankruptcy when a major illness occurs and by the frivolous lawsuits that often balloon health care costs. This risk management to find ways to reduce the costs of providing affordable group health plans for their employees is one of the major concerns of all CFO's.
The positive side of the report is that they are more optimistic about their cash flow and their ability to invest in projects that will add capital to their organization. These plans for their companies future will add wealth to their shareholder's as long as they are thought out properly. Since 2007, most companies have reduced the amount of money they invest in new activities while waiting for economic stability to come again. The fact that they are now willing and able to invest in growth strategies is a sign of good economic growth for years to come. The CFO is responsible for the finances of major corporations only the CEO is in a higher place. The reason why they always create this report based on interviews with CFO's is that they are responsible for cash flow and capital growth spending projects. These projects are the main reason why we see economic growth. When an organization has enough cash flow to plan for growth strategies this is when more workers are hired, more companies are bought, new products are launched, new factories are built, and new markets are entered both domestically and internationally.
One of the most interesting findings of the report is that one out of every four CFO's is considering purchasing a smaller company. These acquisitions often are the center of financial news and increase both capital and revenue almost instantaneously. The increase in capital projects that increase advertising in existing and new markets increases revenue and the bottom line when during the recession some advertising money was reduced due to its ineffectiveness during times of economic instability. Based on the report, 2014 will be the year when major corporations open up their big financial belts to investing in hiring more employees and creating more wealth for their shareholders by spending money on projects that were delayed after the 2007 financial crisis. The ability to expand operations as noted during the 751 interviews with CFO's of major publicly traded companies is good news for the average investor as we should see a continued increase in major publicly traded companies growing bigger while acquiring smaller companies, hiring more employees, launching new advertising campaigns, building new factories, entering new markets, and it was always a lack of confidence in the economy that has kept some plans on the shelf for years.
You can learn more and view this important yearly report on the CFO Outlook report for 2014 by viewing this link: http: // corp.bankofamerica.com/business/ci/landing/cfo-outlook?cm or search 2014 CFO Outlook and you will find the downloadable report along with videos and interviews with important members of the corporate world about the accelerated growth that is expected as new capital expenditures are being plan to add value to shareholders worldwide. As always remember, the money you spend on lottery tickets or smokes could be invested and give you enough money to retire gracefully.