What Makes a Company's Financial Stability So Important?
So you come across Company A during an Internet search. It seems to have the 20,000 widgets you want in stock, in the sizes and colors you need, and the price is acceptable. You check the return policy, and there are quite a few restrictions, but you really need these widgets. You head to Company A's "About Us" page and see that they've been in business since – oh – last year. Well, okay . . . you keep going. You make a phone call to see about credit terms and find out that they don't offer credit.
Would you hesitate to work with Company A?
How do you know if it's operated well and by trustworthy people? Why don't they extend credit? Will the company be around next week, next month, next year? What do you know about their financial condition? How stable are they?
It's important to know the answers to these questions, because having confidence in a company with which you're partnering is crucial. You need to feel secure about the product or service you're purchasing. You want to know that the folks employed there will take care with your contact and payment information. It's in any company's best interest to inform you of their financial condition and make you comfortable about doing business with them.
Some characteristics of a financially stable company include:
Longevity – When a company's been in business for an extended period of time, it gives you confidence that it will continue to be around. You invest a lot of time building relationships with suppliers. You don't want to be retraining new vendors on your needs and requirements.
Full Service – A financially secure company doesn't cut corners. Its leaders and employees continually look for and find ways to be more efficient, thus there's no need to reduce hours, personnel, or services to save expenses.
Good Business Ethics – A company that's been in business for many years is able to do so because it treats its customers well and fairly. If it didn't, few people would want to work with or for that company.
Reinvestment – When profits are reinvested in the organization, aspects of the business such as product quality, customer service, and order accuracy are maintained and improved.
Security of Supply – During challenging economic periods, a financially stable company is better prepared for continued success. That company is far less likely to experience stock shortages, production shutdowns, and payment problems.
Did you know that NewAge Industries has a D&B (Dun & Bradstreet) rating of 3A1, the highest rating available to companies of our size? NewAge has held that credit worthiness rating for over twenty years. Our Altman financial strength score (Z-Score) is three times higher than our industry's average.* NewAge has been in business since 1954, has never had an unprofitable year, and carries no debt. We continually invest in the latest tubing and hose manufacturing equipment to help keep us – and you – competitive.
*MAPP NA Plastics Processing Industry Special Report 2009
What's important to you? Tell us what your top concerns are. Send us an email describing the things that matter most to you when purchasing tubing and hose products: firstname.lastname@example.org.
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