After years of stimulus and low interest rates, the Federal Reserve has tightened its monetary policy. This has shortened investor time horizons and brought into focus current profitability versus future profitability. When capital is cheap and abundant (e.g., 2021), hurdle rates tend to be lower and companies can easily raise funds. This can result in an environment where companies have a long leash in terms of demonstrating profitability and cash flow. Many companies used this environment to grow at any cost and with no regard to profitability. With capital now more restricted, companies that exercised poor capital discipline may now find themselves lacking capital and needing to rethink their business models. Read