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In their review and analysis of the firm's ROE, the management team has become aware of the potential influence of otherqualitative or nonfinancial issues that
In their review and analysis of the firm's ROE, the management team has become aware of the potential influence of other"qualitative" or "nonfinancial" issues that could place the firm and its ROE at risk. These issues include; percent of the sales revenue is from one customer; approximately percent of the firm's essential raw materials come from a single supplier. Furthermore, the labor force at the firm's main facilities is considering becoming unionized. Additionally, management is concerned about the impact of rising inflation and the US Federal Reserve raising interest rates. You have been asked to prepare a brief outline of these issues and explain how each of them could impact firm's ability to maintain or improve the firm's financial performance measured by ROE. Your analysis must demonstrate how these issues might impact the specific components of ROE.
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