Australia's current economic climate could mean that now is a good time to add risk to the balance sheet.
Australian CFOs are seeing the falling value of the Australian dollar as shoring up the slightly wobbly Australian economy. Deloitte Australia’s latest CFO Survey reports that 51 per cent of those asked said it was a good time to add risk to the corporate balance sheet. That’s only the third time in 16 quarters that more than half the CFOs thought that. The survey also reports a jump in the net percentage of CFOs planning to raise their own gearing levels.
“Lower iron ore prices aren’t the whole story and CFOs know it.” Ian Harper, Deloitte Access Economics
The positive judgements came even though CFOs as a group saw only slightly less financial and economic uncertainty facing their companies.
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Deloitte Access Economics partner Ian Harper, who has seen a few commodities cycles, says CFOs understand how much a lower Australian dollar will help the country’s economy overall.
“Whether it’s higher earnings for exporters or easier conditions for firms competing with imports, a cheaper dollar is good news for trade-exposed Australian producers. Lower iron ore prices aren’t the whole story and CFOs know it.”
Worth a shot
CFOs’ reaction to the question: “Is this a good time to be taking greater risk onto your balance sheet?”
This article is from the July issue of INTHEBLACK