The term J Curve is used to explain the profits and losses in a private entity. It also describes the effects that currency devaluation has on trade balance. In today’s global business environment, it can help companies to analyze the impact of political development on important business factors such as; supply chain stability, opportunity assessment, investment timing and operating stability.
It is not wrong to say that J curve is a new way to understand why countries rise and fall. A nation’s current and future position on the J curve provides companies a different mode of evaluating the relative attractiveness of political risks and individual markets to transnational supply chains.
Several private and economic equity funding scenarios call for use of the J curve on a diagram. Take a look at some of the important points:
- The J curve is most notably used in economics and in such a field it’s effect is relevant to the data of many fields. In these fields, new policies and investments present an initial loss of funds followed by an important gain.
- Mainly, the gain is represented by a vertical line and the loss of funds is shown by the part of the curve that dips below the starting point. The various curves on the diagram show the losses and profits of a company and country.
- On a diagram, the loss in currency value is represented by a curve or dip. As the time passes by, citizens become habitual to the new currency value and tend to buy local products over the imported goods.
- Further on, it leads to financial gain for the country which is shown by a vertical line that completes the J on a diagram. As a country’s trade value drops, the value of currency depletes which can be easily seen on the diagram.
Executives of big companies are challenged regarding how to use the knowledge to help enhance business performance and how best to assess the risk factors prevalent.
If you need to prepare presentations with this kind of J-shaped diagram and curves, then you can download the free J-Curve PowerPoint template that we have published on SlideHunter.com – This J-Curve PPT Template has an editable curve design suitable to make presentations with J-Curves.
Hence, in today’s highly competitive business world J Curve is the first step to make better decisions about where, when and how to invest globally.