CFO Alliance Sentiment Study

Middle Market CFOs Bullish On 2018 Revenue And Earnings

Seeing projected gains in every sector from retail to transportation, technology to manufacturing

PHILADELPHIA, Feb. 14, 2018 /PRNewswire/ — A nationwide survey of more than 500 middle market senior financial executives reveals a positive outlook for 2018 — with nearly 75% of respondents predicting that both the global and domestic economy will remain strong through the coming year.

The 2018 CFO Sentiment Study, “The Collective Mind of the Modern CFO,” a collaboration between the CFO Alliance and Workday, also shows that nearly 73% of the respondents expect 2018 revenue to outpace the previous year, 63% expect this year’s earnings will outpace 2017, and 51% expect margins to be higher this year.

“Both Wall Street and ‘Main Street’ should be pleased with this news,” said Nick Araco, founder of CFO Alliance, an international organization of 7,000 financial executives from companies with revenues between $10 million and $5 billion. “We’re seeing projected gains in every sector from retail to transportation, technology to manufacturing, construction to healthcare, to non-profit and education. We also found that more than half of the CFOs are also confident in their ability to access capital and/or credit, further positioning them for growth.” Nearly 60% of respondents expect their companies’ growth to be organic — coming from continued investments in existing products and services, increasing sales channel opportunities, and geographic market expansions.

Anticipated Challenges

The study questioned senior financial executives about anticipated challenges, areas of focus, and evolving leadership in the middle market. Cyber security and enterprise risk management remain high priorities as most senior financial executives feel their companies are underprepared. But, respondents named the biggest risk-related challenge their organizations face as losing talent or an inability to find and hire talent, with 45% of respondents ranking talent-related issues highest over other challenges like regulatory compliance, geopolitical issues, or cyber security.

Both Wall Street and Main Street should be pleased with this news

“Winning the war on talent is critical to everyone,” added Araco. “Talent that can understand analytics and use data effectively is very important to all of these organizations, but sales talent, in particular, is the crown jewel. Organizations are seeing a void here and need it to achieve their strategic plans and hit their targets.” Almost 70% of respondents said they would like to upgrade their current sales staff and sales support staff, and 77% feel their enterprises are less than effective at converting leads to sales.

Talent acquisition did not used to be in the purview of a company’s top financial officer, however the study points to new, expanded roles and responsibilities of the modern CFO. “The old, dusty stereotype is that chief financial officers and finance executives are bean counters, segregated to the world of spreadsheets and bank ledgers,” explained Araco. “This has changed dramatically. We see the modern CFO as an athlete of sorts — agile, quick, and well rounded. They must have knowledge and participation in operations, sales, marketing, human resources, information technology, and more in order for themselves and their companies to compete.”

The CFO Alliance is a leading network of more than 7,000 CFOs and other executives from emerging and middle market enterprises, private, public, and not-for-profit. The CFO Alliance is both a collaborative online community platform, and the host of frequent face-to-face learning and networking events in more than 15 cities across North America. The organization conducts several studies each year including the CFO Sentiment Study, frequent “Pulse” surveys on timely topics, and the annual Middle Market Executive Compensation Survey.