What would a professional managing credit be doing in 10 years?
In 10 years, a credit manager could potentially have a more advanced and strategic role, with the title evolving in response to industry changes. The profession might shift from purely managing credit to integrating with broader financial risk and business strategy.
Here are some key developments that might shape the role:
In short, credit professionals will likely evolve into multi-disciplinary risk managers with a broader scope of responsibilities, blending finance, data science, and strategic leadership. The title may no longer simply be "credit manager" but rather reflect their expanded, forward-thinking role in safeguarding financial health across organizations. What do you see in your crystal ball?
In this edition of "I ASKED AI," we dive into the day-to-day role of a Strategic Credit Analyst in the B2B context. Curious about how this key player in credit management navigates their responsibilities? I posed the question to AI to gain insights into the typical tasks, challenges, and strategies they employ to ensure businesses are making sound financial decisions and minimizing risks. Here's a look at how a Strategic Credit Analyst would spend their day in the fast-paced world of B2B credit. I'd love to hear from you—do you think this description is accurate? Feel free to share your thoughts and let me know if your day includes other tasks or responsibilities! Morning: Data Analysis and Risk Assessment
Mid-Morning: Collaboration and Decision-Making
Midday: Strategic Planning and Reporting
Afternoon: Technology and Process Optimization
Late Afternoon: Strategic Projects and Continuous Learning
End of Day: Wrap-Up and Planning Ahead
In today’s fast-changing world, the saying “hire for slope, not for intercept” has never been more relevant. What you know—your INTERCEPT—matters less than how fast you can learn and adapt—your SLOPE. When the world changes rapidly and unpredictably, a steep slope is more valuable than a high intercept. WHY SLOPE MATTERS MORE TODAY Industries are being turned upside down. AI is reshaping the nature of work and redefining competitive advantage. Disruption is the norm. Just look at the last six months: OpenAI’s O1 and O3 reasoning models, Deepseek’s R1, and Perplexity’s Deep Research have upended how we use AI. In this environment, relying on what you already know is risky. To stay relevant, you must constantly reinvent yourself. This is where Growth Mindset comes in. Coined by psychologist Carol Dweck, it is the belief that abilities can be developed through learning and effort. People with a growth mindset focus on improving (their slope), while those with a fixed mindset rely on their existing knowledge (their intercept). TIPS FOR INCREASING YOUR SLOPE 1. Believe in Your Ability to Grow: Treat challenges as opportunities to learn, not as threats to your expertise. When I saw the AI wave coming five years ago, I jumped in head-first—and I’m having the time of my life. 2. Commit to Continuous Learning: Make it a habit to learn something new regularly. Whether through online courses, podcasts, books, or conversations with innovative people, always be a sponge. 3. Apply What You Learn: Use new knowledge and tools in your day-to-day work. Experiment, learn, and adapt. I use generative AI dozens of times a day—from writing and teaching to consulting and learning. 4. Stay Curious: Be restless. Ask questions, explore new fields, and embrace ideas that challenge your current beliefs. I wake up every day with questions and engage in conversations that spark new curiosity. The more I learn, the hungrier I become. Surround yourself with lifelong learners—their energy fuels your growth. 5. Use Intercept to Drive Slope: Your intercept—your accumulated knowledge and experience—can help you learn faster. For example, if you’re an expert in marketing, you can use that expertise to understand new digital marketing tools more effectively. What you know can accelerate your learning curve. My key message - you must focus on learning, adapting, and growing. Don’t measure your career by where you are today. Don’t measure your expertise by what you know now. Measure yourself by your ability to learn and grow. In a world of rapid change, slope beats intercept every time. Published with permission from Professor Mohanbir Sawhney, Kellogg School of Management, Northwestern University: https://www.kellogg.northwestern.edu/faculty/directory/sawhney_mohanbir/ Prof. Sawhney is a globally recognized scholar, teacher, consultant and speaker in business innovation, modern marketing, and Artificial Intelligence applications in business.
The recent bankruptcy protection filing of Picture Butte Feeders Cooperative (PBFC), Alberta's largest feeder association, has sent ripples through the Canadian livestock industry. This event highlights the interconnected challenges faced by creditors, cattle producers, and the broader supply chain. By examining the factors behind PBFC's financial struggles and extending the analysis to future risk management, we can uncover critical lessons for stakeholders in the livestock sector.
Part 1: What Led to Picture Butte Feeders Cooperative's Bankruptcy?
Tracing the Challenges from Consumers to Creditors
The financial troubles of PBFC can be understood by working backward through the supply chain—from consumers to creditors—revealing how systemic pressures compounded over time.
1. Consumer-Level Pressures
2. Livestock Producers' Challenges
3. Feeder Association-Level Struggles
4. Credit-Issuing Organization Issues
Part 2: Lessons Learned and Strategies for Future Risk Management
The collapse of PBFC offers valuable lessons for creditors, cattle producers, and other stakeholders in the livestock industry. Proactive risk management and strategic adaptation are essential for navigating future challenges.
1. Adapting to Consumer Trends
2. Risk Mitigation for Producers
3. Best Practices for Creditors
4. Strengthening Supply Chain Collaboration
5. Policy Advocacy and Education
Conclusion
The bankruptcy protection filing of Picture Butte Feeders Cooperative serves as a cautionary tale for Canada’s livestock industry. It underscores the importance of proactive risk management at every level—from consumers all the way up to creditors. By learning from these challenges and implementing strategic changes, stakeholders can build resilience against future disruptions while ensuring long-term sustainability in Alberta’s livestock sector.
As reported by BNN Bloomberg, Ford's CEO has warned that a 25% tariff on automotive imports could significantly disrupt the industry, driving up costs and potentially slowing down vehicle production. This warning highlights the ripple effect that such tariffs could have across the supply chain, impacting businesses both directly and indirectly tied to automotive manufacturing.
Ripple Effect on the Supply Chain
The tariffs could lead to financial strain not only for major automotive manufacturers but also for the vast network of suppliers supporting them. Smaller vendors, such as those providing office supplies, cleaning materials, or non-essential items like coffee machines and mats, could see reduced orders as automotive companies tighten their budgets. These businesses may experience delayed payments and lower demand as automotive companies reallocate their resources to core production needs.
Key suppliers, such as steel manufacturers and tool and die companies, which provide the raw materials and specialized equipment necessary for automotive manufacturing, might also face order slowdowns. As vehicle production halts or slows due to tariff-induced cost increases, these upstream suppliers could see their revenue shrink and face longer payment cycles, which could create a ripple effect further down the supply chain.
Mitigation Strategies
By taking these proactive steps, B2B credit professionals can position themselves to better navigate the potential disruptions caused by tariffs in the automotive industry.
Source: BNN Bloomberg
Introduction: Understanding the Basics
Ever stumbled upon the terms "capital subscribed" and "capital paid" in a company's financial statements and felt a little lost? You're not alone. These phrases, while seemingly straightforward, can have significant implications, especially when a company faces financial difficulties. Understanding them is crucial for creditors trying to understand their potential for recovery. This post aims to demystify these concepts and shed light on their importance specifically for creditors.
Defining Key Terms: The Pizza Analogy
Let's start with the basics. Imagine a company as a pizza. The authorized share capital is the whole pizza – the maximum amount of ownership the company is allowed to sell. The issued share capital is the number of slices they've actually cut and made available to investors. Now, subscribed capital represents the slices people have committed to buy, while paid-up capital is the number of slices they've actually paid for.
Subscribed vs. Paid: The Crucial Difference
So, what's the difference? Subscribed capital is a promise, while paid-up capital is the real deal. It's the actual money the company has received from investors in exchange for those ownership slices (shares). Investors agree to buy shares at a certain price, and once they've paid that price, they have "paid-up" their subscribed capital.
Implications for Creditors: Priority and Recovery
Why does this matter, especially for creditors? In a bankruptcy scenario, creditors have a higher claim on the company's assets than shareholders (the pizza eaters). Paid-up capital represents the shareholders' investment – their slice of the pizza. After all the creditors are paid, if there's any pizza left, then the shareholders get a share, based on their ownership percentage.
Unpaid Subscribed Capital: A Potential Lifeline
Here's where things get interesting for creditors. If a company's assets aren't enough to cover all its debts, the bankruptcy trustee might come knocking on the shareholders' doors for any unpaid subscribed capital. Remember those slices people committed to buy but haven't paid for yet? They might be legally obligated to pay up to help satisfy the creditors. This is a crucial point for creditors to understand – it represents a potential additional pool of funds.
Unpaid Subscribed Capital vs. Receivables: Understanding the Nuances
You might be thinking, "Isn't this just like unpaid invoices – uncollected receivables?" It's a good analogy, but there are important differences. Unpaid subscribed capital is tied to the company's equity, not its day-to-day operations like receivables. It's a commitment to invest, not a payment for goods or services. And the company (or the trustee) often has stronger legal grounds to pursue unpaid subscribed capital than regular receivables. For a creditor, this means the possibility of recovering more than just what the company directly owes.
Use Cases: When Unpaid Subscribed Capital Matters Most
While not every bankruptcy involves unpaid subscribed capital, it can be a critical factor, especially for companies with staged payments for shares, complex corporate structures, or in sectors like finance where regulatory capital requirements are stringent. Imagine a tech startup raising funds in rounds – investors might pay for their shares in installments. If the startup folds before everyone has paid their dues, creditors will be looking at that unpaid subscribed capital as a potential source of recovery.
The Creditor's Perspective: Assessing Recovery Potential
So, why should a creditor care? Understanding capital subscribed and paid helps you assess the potential for recovery in a bankruptcy. Are there significant amounts of unpaid subscribed capital floating around? This could significantly impact the funds available to satisfy creditor claims.
Conclusion: A Crucial Piece of the Puzzle
Capital subscribed and paid might seem like just another line item in a financial statement, but it's a crucial piece of the puzzle, especially when the company's future is uncertain. It's a reminder that share ownership comes with responsibilities, and that understanding the fine print can make all the difference for creditors.
Disclaimer
So, there you have it! My journey into the world of "capital subscribed, paid, and unpaid," guided by Gemini AI. Remember, this is just for informational purposes, not professional advice.
Tariffs are a crucial element of international trade policy that have shaped economic relationships between nations for centuries. This primer will explore the nature of tariffs, their purposes, and their effects on global commerce.
What Are Tariffs?
Tariffs are taxes imposed on imported goods when they cross national borders. The most common type is an import tariff, which is levied on products brought into a country. While export tariffs exist, they are rare, and in the case of the United States, they are constitutionally prohibited.
Purpose of Tariffs
Tariffs serve several key functions:
1. Revenue Generation: Historically, tariffs were a significant source of government income, especially before the widespread adoption of income taxes.
2. Industry Protection: By making imported goods more expensive, tariffs can shield domestic industries from foreign competition.
3. Addressing Unfair Practices: Tariffs can be used to counteract subsidies or dumping by foreign countries that artificially lower the price of their exports.
4. National Security: Some tariffs are implemented to protect industries deemed crucial for national security.
Types of Tariffs
There are several types of tariffs:
- Ad Valorem Tariffs: Set as a percentage of the import's value
- Specific Tariffs: A fixed amount charged per unit of imported goods
- Tariff-Rate Quotas: Tariffs that increase significantly after a certain import quantity is reached.
Who Pays for Tariffs?
Contrary to popular belief, tariffs are primarily paid by the importing businesses and, ultimately, passed on to consumers in the form of higher prices. This means that when a country imposes tariffs, its own citizens often bear the cost.
Historical Context
The United States has a long history with tariffs, dating back to the country's founding. Tariffs were a primary source of government revenue until the 1930s when income taxes became more prominent. After World War II, there was a general trend towards reducing tariffs globally as part of efforts to promote international trade.
Recent Developments
In recent years, tariffs have regained prominence as a policy tool. For example:
- In 2018, the United States imposed tariffs on various goods, including steel, aluminum, solar panels, and washing machines.
- These actions led to retaliatory measures from other countries, including Canada and the European Union.
- More recently, in 2025, the U.S. implemented new tariffs on imports from Canada, Mexico, and China, citing national security concerns related to immigration and drug trafficking.
Economic Impact
The economic effects of tariffs are complex and often controversial:
- Consumer Costs: Tariffs typically lead to higher prices for consumers.
- Domestic Industry: While some industries may benefit from protection, others that rely on imported inputs may suffer.
- Global Trade: Extensive use of tariffs can lead to reduced international trade and potential economic slowdowns.
- Retaliation: Trading partners often respond with their own tariffs, potentially escalating into trade wars.
Tariffs remain a powerful but contentious tool in international trade policy. While they can protect domestic industries and generate revenue, they also risk increasing consumer prices and sparking international trade disputes. As global economic relationships continue to evolve, the debate over the use and effectiveness of tariffs is likely to persist.
Insolvency cases in Canada have seen a notable rise in 2024, reflecting the growing financial challenges facing both consumers and businesses across the country. The trends highlight mounting economic pressure, driven by a combination of high interest rates, inflation, and other external factors.
Rising Consumer Insolvencies
Consumer insolvencies have reached significant levels in 2024, with the third quarter of the year seeing 34,588 filings. This marks a 13.5% increase compared to the same period in 2023, a concerning sign of rising financial distress among Canadians. Ontario, in particular, has experienced the sharpest rise, with a 20.2% increase in consumer insolvencies year-over-year, totaling 13,140 filings in the third quarter alone.
Business Insolvencies at a 15-Year High
Business insolvencies have also surged in 2024, with 1,312 businesses filing for insolvency in the third quarter. This represents the highest third-quarter volume since the 2009 Great Recession, indicating that companies are facing severe financial challenges. The first quarter of 2024 saw an even more dramatic rise in business insolvencies, with an 87.2% increase compared to the same quarter in 2023, marking the sharpest jump in 37 years.
A total of 2,003 businesses filed for insolvency in the first quarter, the highest volume since the 2008 financial crisis. Over the 12-month period ending March 31, 2024, business insolvencies increased by 56.7% compared to the previous year, reflecting the tough economic climate.
Small and Medium-Sized Businesses Hit Hardest
Small and medium-sized businesses (SMBs) have been particularly affected by these rising insolvencies. Unlike larger corporations, many SMBs lack the resilience and access to capital necessary to weather economic downturns. As a result, these businesses are struggling to survive in an environment characterized by higher debt-carrying costs and declining consumer demand.
The Factors Behind the Surge
Several factors are contributing to the surge in insolvencies in both the consumer and business sectors. High interest rates and inflation have placed significant financial strain on individuals and companies alike, making it more difficult to manage existing debt and navigate increased living costs. The end of pandemic-related government support programs has also left many without the safety net they relied on during the height of the COVID-19 crisis.
Additionally, new debt obligations, such as the repayment of CEBA (Canada Emergency Business Account) loans, have added further financial pressure on businesses, pushing many over the edge into insolvency.
A Continuing Trend of Financial Struggles
As 2024 continues, the financial strain on both individuals and businesses in Canada shows no signs of abating. With the combination of rising interest rates, higher inflation, and the loss of government support, many Canadians and businesses are finding it increasingly difficult to manage their financial obligations. This trend paints a picture of ongoing financial challenges for the foreseeable future.
Operational and Strategic Red Flags: A Closer Look at CVS and Lessons for Credit Professionals
Operational and strategic decisions made by a company can offer critical insights into its financial health. While changes in business direction can reflect innovation and adaptability, they often mask underlying distress. This section focuses on two key red flags observed in CVS’s operations—store closures and aggressive cost-cutting measures—and their implications for creditors and analysts.
In recent years, CVS announced the closure of hundreds of retail locations as part of its strategy to pivot away from traditional retail operations and focus on health services, such as walk-in clinics and pharmacy benefits management. This move was framed as a way to "streamline operations" and adapt to changing consumer behaviors.
Large-scale store closures can signal more than just strategic realignment. For creditors, this raises red flags about potential overextension or failure to sustain profitable operations in certain markets. Restructuring often reflects deeper financial or operational inefficiencies, and such closures may not immediately lead to cost savings due to associated expenses like lease terminations, severance payments, and asset write-offs.
· Announcements of closures: Regular press releases or earnings calls discussing closures, divestitures, or layoffs.
· Strategic pivot rationale: Examine whether restructuring aligns with long-term strategy or is a reactive measure to cash flow constraints.
· Impact on revenues: Monitor subsequent earnings reports to gauge whether closures result in improved margins or continued revenue decline.
Other Examples
Companies like Sears and J.C. Penney pursued similar closure strategies in their decline. While their aim was cost-saving, it highlighted weakening market positions, strained resources, and a failure to compete effectively with e-commerce competitors like Amazon.
CVS implemented several cost-saving programs across its operations, including layoffs, reduced capital expenditures, and operational efficiency initiatives. While these actions were part of a broader restructuring, they also hinted at potential liquidity concerns.
For a company of CVS’s scale, drastic cost-cutting can signify immediate financial pressures or attempts to meet short-term targets at the expense of long-term value creation. This may erode employee morale, hinder innovation, and compromise service quality, potentially damaging brand equity and customer loyalty.
· Public filings: Look for restructuring charges, asset sales, or deferred investments in SEC filings and earnings reports.
· Operational capacity: Assess whether cost-cutting leads to reduced customer satisfaction or operational inefficiencies.
· Competitor analysis: Compare CVS’s strategies with peers like Walgreens or Amazon Pharmacy to understand market dynamics and whether CVS’s approach is defensive or proactive.
· General Electric (GE) aggressively reduced costs in the 2010s, only to find itself struggling to maintain market share and product innovation.
· WeWork slashed expenses during its post-IPO turmoil, reflecting cash flow problems and difficulty maintaining its valuation narrative.
1. Scrutinize restructuring announcements: These can indicate underlying financial distress, even when labeled as strategic pivots.
2. Evaluate cost-cutting in context: Temporary savings that compromise long-term sustainability are concerning for creditors.
3. Track industry trends: Operational shifts may reflect broader market challenges rather than company-specific weaknesses.
By closely monitoring these red flags, creditors can better understand the risks involved in extending credit to companies like CVS and proactively safeguard their interests.