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    Thread: What is the impact of high inflation on the value of a business?

    1. #11
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      High inflation take place, at the time, the seeking power of dollars collapse , in relevant to disparate currencies. Even if; the dollar drop in value, costs for boundaries price increased, in addition to; substitute interconnected this day raise in Universe between many countries, seeking of raw materials and frequently want to be made in foreign currencies. Inflation value are rising, the cost in seeking strength of paying the loan back will be less than the equivalent of the loan taken away. Whatever extent, the case support of any debt, companies must be keen concerning how much they take out and for what, therefore, variation of a low price won't guarantee them out if income didn't rise origin of the current business undertaking or a new addition.
      High inflation is not encourage and i think the excellent option is to redeem ones money in the bank in addition to; high involvement value to receive from it, up to the time that one have average inflation in ones country at that time, i think one need to constitute money for useful plannig with small interest.


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      High inflation rate always have a bad impact in any business because when the inflation rate rises ,there are some points to be noted as follows :-

      1. Reduction of the value of the money of that particular Nation .

      2.The currency exchange rate been affected and that indirectly can hamper the export system of that Country .

      3. The price of every items increases and for that the small business industries are most badly affected .

      4. Here the production of the goods will also increase .

      5.When interest rate decreases ,more people are interested to borrow money and in every hand money will be there to spend and like that inflation rate may also increase.


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      Default Re: What is the impact of high inflation on the value of a business?

      Inflation can affect a business in a many areas, first we need to understand what really is an inflation, inflation is the excess increase in price of the goods and services .
      it can affect the rate of production: when there is inflation the rate at which product is being produce will be reduce because of many reason
      1. there will be low in demand because people may find it difficult to afford such product
      2. the producers will also produce less because the raw materials price as increase.
      3. inflation will also then affect business profitability
      so in this case its not only the value of a business that will be affected but every area in an economy


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      Default Re: What is the impact of high inflation on the value of a business?

      Basically, inflation happened in result of a continuous increase in prices, it creates uncertainty and wipes out the value. There are some specific advantages and disadvantages which are

      Advantages of Increased Inflation,
      1. Deflation (a fall in prices negative inflation) is very harmful.
      2. Enables adjustment of wages.
      3. Enables adjustment of relative prices.
      4. Boost growth

      Disadvantages of Inflation,
      1. Fall in real wages
      2. Reduces the value of savings
      3. Uncompetitive economy
      4. Increased borrowing cost

      Inflation also makes it easier on debtors, who repay their loans in installment with money that is less valuable than the money they borrowed, its make easy to repay.

      I Trade Structures, not Noise.


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      Default Re: What is the impact of high inflation on the value of a business?

      Quote Originally Posted by dtvade View Post
      What is the impact of high inflation on the value of a business especially to an entrepreneur who is just starting?
      High inflation plays a very important role in forex trading market for example if the inflation of america increases then it will make a very big impact on the forex trading market because when inflation increases in America the currency of America goes down and dollar goes down and its value also decrease the traders will small value to the us dollar against other currency and they will sell the us dollar against other currencies for making profit against the dollar inflation plays a very big role in development of any country


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