Calmer seas are always welcome when the water has been so choppy. That’s what Q3 2020 was to much of the middle market – a respite from the previous two quarters’ turmoil and uncertainty.
But just like everything else in 2020 so far, there’s more than meets the eye to the relative tranquility of Q3. That’s a dynamic we took a closer look at with our Q3 edition of the Embark Middle Market Report – where the business environment stands compared to prior quarters and, most importantly, what companies should expect in Q4 and beyond.
Like our previous analyses, we sampled a hundreds of mid-market companies, examining key financial data like:
- Revenue
- Net income
- Impairments
- Cost reductions
- Debt restructuring
- Risk factors
- Going concern
The result is a group of insights rooted in quantitative data that CFOs and their teams can use to gauge their own performance in Q3 and inform their strategies going forward.
Pockets of Uncertainty and Risk
While respites from turmoil are quite lovely, that’s not to say, of course, that all is back to normal for mid-market companies. In fact, as you’ll see in our Q3 report, particular sectors are still experiencing extreme bouts of uncertainty and volatility. For example, while nearly half of consumer discretionary companies realized year-over-year revenue growth, the other half saw moderate to severe declines in Q3.
And that’s just a single example of the uncertainty that continues to blanket the marketplace, bringing us to one of the underlying themes of our Q3 report – a respite is just that. A respite. As we look ahead to what’s almost certain to be an extremely challenging winter and perhaps even spring, now is the time for CFOs to start game planning.
Flexibility Reigns Supreme
To snag another few stats from the Embark Middle Market Report for Q3, over a quarter of all sampled companies still either restructured their debt or entered into new debt in the quarter. Further, 40% still implemented significant cost-cutting strategies like furloughs and wage freezes in Q3.
Obviously, liquidity remains a critical concern, so it’s important that CFOs make their accounting and finance functions as flexible and fast as possible. Decision makers need immediate, accurate, and relevant information to successfully navigate this challenging landscape.
But that’s why Embark’s goal with our Middle Market reports is to provide insights that, along with transformation initiatives and strategic thinking, can help your company traverse this rough terrain. So download our Q3 report today and start planning for tomorrow. You’ll be glad you did.
