How can companies balance earnings pressures

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Question - Companies are under pressure to maintain their earnings because of the scrutiny that ratios like ROE and EPS bring about.

Companies are also increasingly under pressure to pay better wages. In most cases it is more than just pressure because local governments have mandated higher minimum wages. Businesses with stores in more than one community have to bring all stores up to the same wage to prevent inequity between stores.

While the price of gas and other commodities float up and down, wage increases are permanent and will have a lasting impact on earnings. Companies can raise prices to offset the increased expense, but that could slow down sales.

How can companies balance earnings pressures and still pay a fair wage?

Reference no: EM133123737

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