--- title: Business Acumen Guidance to Understand Restating Corporate Guidance description: "How will Q1 investor calls be managed as we recover from the pandemic? We examine 3 business acumen metrics to help you understand: revenue, profit & cash" image: https://www.advantexe.com/hubfs/investor-call-business-acumen.png --- [![logo-advantexe-150.png](https://www.advantexe.com/hs-fs/hubfs/logo-advantexe-150.png?width=150&height=123&name=logo-advantexe-150.png "logo-advantexe-150.png")](https://www.advantexe.com) ![blog-banner-2022](https://www.advantexe.com/hs-fs/hubfs/blog-banner-2022.png?width=973&name=blog-banner-2022.png "blog-banner-2022") ### The Advantexe Advisor Blog - providing a deep and applicable understanding of the system of business. # Business Acumen Guidance to Understand Restating Corporate Guidance By Robert Brodo | Apr 14, 2020 7:58:35 AM | [![Share on Facebook](https://static.hubspot.com/final/img/common/icons/social/facebook-24x24.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://static.hubspot.com/final/img/common/icons/social/linkedin-24x24.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://static.hubspot.com/final/img/common/icons/social/twitter-24x24.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=Business%20Acumen%20Guidance%20to%20Understand%20Restating%20Corporate%20Guidance) [![Share on Pinterest](https://static.hubspot.com/final/img/common/icons/social/pinterest-24x24.png)](http://pinterest.com/pin/create/button/?url=https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Dpinterest&media=) [![Share on Email](https://static.hubspot.com/final/img/common/icons/social/email-24x24.png)](mailto:?subject=Check%20out%20https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Fwww.advantexe.com%2Fblog%2Fbusiness-acumen-guidance-to-understand-restating-corporate-guidance%3Futm_medium%3Dsocial%26utm_source%3Demail) Over the next few weeks, CEO’s and CFO’s of publicly traded companies will start their Q1 investor ![investor-call-business-acumen](https://www.advantexe.com/hs-fs/hubfs/investor-call-business-acumen.png?width=300&name=investor-call-business-acumen.png)calls and state and restate the obvious to analysts, shareholders, and employees: *“We are in the middle of a global health pandemic that is pushing the world economy to the brink of financial collapse and therefore we are going to need to restate our guidance for the year*. For many companies that were enjoying record valuations and growth, these upcoming investor calls are going to be extremely painful and it will be up to the leaders to use their best analysis skills to provide a realistic vision of the future including providing guidance for the rest of year results. For many of the 7,000 followers of this blog who have been through a rough year or two in one of our [business simulations](https://www.advantexe.com/the-power-of-practice-business-simulations), you are probably thinking to yourself, “Been there, done that, no big deal.” Well, to you great learners of [business acumen](https://www.advantexe.com/blog/business-acumen-skills-5-most-important-elements-of-a-learning-journey) who took your lessons from the simulation and applied them to your real world decision making, I wanted to provide you with some insights and guidance for understanding what’s about to happen and why in terms of the restated guidance that is about to occur. The pandemic is impacting different industries and different companies in different ways.  Companies in healthcare, consumer products, media, and technology are doing relatively okay.  Companies in travel, retail, automotive, professional services, and energy are really hurting. Here are insights for three metrics that matter for upcoming investor calls that you can be thinking about and listen for as you start to decode what is being said from a [business acumen](https://www.advantexe.com/business-acumen) perspective: **Revenue Guidance** The majority of companies changing their guidance will start with decreasing guidance for top-line revenues. If you do the basic math, let’s say a company just lost an entire quarter’s worth of revenue. That would be 25% of annual revenues. But of course, things aren’t going to magically restart in the third quarter with everything “back to normal.” So maybe another 10% is lost in the second quarter. But then there is going to be this [“pent up demand”](https://www.advantexe.com/blog/the-danger-of-relying-on-pent-up-demand-post-covid-19) that should accelerate the 4th quarter with outrageous spending for a happy 2020 holiday season which increased revenues by 10%-20%. When you add it all up, one could logically give guidance on revenues as follows: - Low impacted industries (like healthcare, consumer goods, etc.) will see a restating of their revenues to be down 15%-30%. Anything outside of those parameters should be a surprise. - Highly impacted industries like airlines and retail will see a restating of revenues to be down 30%-50%. **Profit Guidance** Profit will be a completely different story. Because things hit so quickly, many companies started to layoff and furlough employees as soon as they could. For example, Marriott has no other choice than to furlough more than two-thirds of their 4,000 great employees in mid-March. Remember, from a business acumen perspective, in a people intensive business like Marriott’s more than 70% of the expense on their P&L is people so they are in better shape managing the expenses which in turn drives the profit of the business.  The same goes for the airlines who furloughed thousands of employees but since they also cut nearly all their flights can save on the expenses of fuel, parts, food, and entertainment. - Low impacted industries will see a restating of their profits to be down 15%-30%. - Highly impacted industries will see a restating of profits to be down 20%-40%. **Cash** The most significant difference, other than size between a large global corporation and a small to medium-sized business, is how they treat and manage cash.  The data shows that most small businesses are about to go 2-3 months in terms of cash flow during a crisis like this where large companies can go years or sometimes even decades without making a profit and relying on cash through either financing or debt.  Remember, Amazon went more than 10 years without making a profit, losing billions of dollars which was funded by shareholder equity when the business went public. During this pandemic, big companies will utilize existing cash and cash taken from their credit line to fund the differences between the lower revenues and the lowers profits.  The key metric related to cash will be the reduction of the cash balance on the balance sheet from when the pandemic started to be felt in the corporate world in March, and where the cash is at the end of December. - Low impacted industries will see a restating of their cash positions to be down 7.5%-15% - Highly impacted industries will see a restating of cash to be down 25%-50%. In summary, the upcoming Q1 investor calls will be fascinating and highly informative. They will show the true colors of leadership, and the financials in black and white.  I hope you use these guidance tools understand and decode so you can make the best business decisions possible under these extreme circumstances. [![Coaching-micro-simulation](https://no-cache.hubspot.com/cta/default/1153922/e3231dd5-9a73-4f4d-995d-ff370418e0fe.png)](https://cta-redirect.hubspot.com/cta/redirect/1153922/e3231dd5-9a73-4f4d-995d-ff370418e0fe) ![Robert Brodo](https://www.advantexe.com/hubfs/Blogs/rob-brodo-author.png) **About The Author** Robert Brodo is co-founder of Advantexe. He has more than 20 years of training and business simulation experience. [**](https://www.advantexe.com) [**](https://twitter.com/robrodo) [**](https://www.linkedin.com/pub/rob-brodo/0/334/574) COMMENTS ### SUBSCRIBE VIA EMAIL ### About Advantexe Advantexe is a gold medal winning training and performance improvement organization specializing in the development and delivery of interactive learning journeys using computer-based business simulations as the catalyst for learning and change in the areas of: Business Acumen, Business Leadership, and Strategic Business Selling learning solutions. 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