Twice a year we carry out the “Deloitte European CFO Survey” with the participation of at least 1.000 CFO’s from 17 different European countries. This study also attracts significant attention and involvement of the financial operations managers from the leading domestic companies. Specifically, in order to feel the pulse of economy, I put great emphasis on the CFO’s standpoints. Ultimately, they are the ones making the calls about the money. In the following, I’ll make an effort to present the findings of the 2016 3rd quarter Deloitte European CFO Survey along with the insights of Turkish and European CFO’s. CFO’S ARE CAUTIOUS BUT OPTIMISTIC Although we carried out the 2016 1st quarter report not long ago, many major incidents occurred afterwards, in particular the coup attempt on June 15th and the collisions around our southern border. In advance of our survey, we were curious about the influence of these incidents over the CFO’s in Turkey. As the findings point out, no panic emerged among the professionals in charge of the companies’ money reserves. Besides, just like we observed in our previous report, the “cautiousness” and the “wait-and-see” attitudes commonly remain. According to the report the percentage of the CFO’s who believe that their financial performance will improve has decreased to 30% from 34%. The percentage of the CFO’s expecting revenue increases is 68% with comparison to 71% in the 1st quarter of 2016. Despite the global, regional, social, economic and geopolitical turmoil three out of every four companies’ projections of growing revenues portray a positive state. Percent of the CFO’s expecting greater profit margins is 54%. In conjunction with this we observe that many of these companies have recently initiated profit boosting projects. Moreover, no decline in investments and employment has been projected. Apparently CFO’s assess existing tribulations as temporary and in the long run, they trust in the economy and their companies. In particular, 40% state that their investments will continue to grow similarly to the previous report. I regard such commitment in investing and expanding as an indicator and outcome of the Turkish companies’ inherent entrepreneurship notion. Most striking is the expectancy of increased employment. In comparison to the 36% level in the previous report, it climbed up to 46% level. In other words, nearly half of the companies investigated are planning to employ more people. Additionally, there is no significant increase in the percentage of the firms which consider destaffing. Such willpower possessed by the Turkish firms indicate that the risks of economic shrinkage and unemployment are not inevitable that it instills hope for all of us. WE APPROACH RISKS PRUDENTLY “Risks” is one of the most important sections in our survey. At the time survey was conducted it had been three months after the Brexit, two and a half months after the coup attempt in Turkey and one months after the beginning of the Fırat Kalkanı military operations in Syria. Reports of financial rating agencies about Turkey was on debate and the US presidential elections were not completed. Despite these circumstances, according to our study, CFO’s opinions regarding the uncertainty of the financial markets and economy were not negatively influenced. Percentage of the uncertainty statements rise up to 69% from the 67% in the previous survey. I can regard it as normal. The World and Turkey are passing through a remarkable period in which everything can turn out in any direction very rapidly. In that manner, instead of ignoring the uncertainties, it becomes crucial to find ways to handle them and generating strategies and action plans. On the other hand, CFO’s decided stance towards the risks are ongoing. In the 2016 1st quarter, percentage of CFO’s avoiding new financial risks was 94%. Although the decrease of this percentage to 86% in the last survey points out a leaning to a more risk taking approach, we should admit that a great majority of the CFO’s still remain risk aversive in this period. Even if this value had been increased, it would not be considered as surprising under the given conditions. Regarding the survey question about the biggest risk factors, Turkish CFO’s answers have not changed since the previous survey. Geo-political risks takes the first place. The risk of devaluation of the Turkish Lira comes in the second place and the risk of cash-flow defects in the third. In the fourth place the risk of shrinking domestic demand comes. In the previous study, averaged value of these four risks were 56% and now it climbs up to 63%. Frankly speaking, these consistent and iterative responses indicate that these issues go beyond being risk factors and being regarded as reality instead. Besides, two and a half months following our previous study proved CFO’s right about these four risk factors. In this period we observed new initiatives by the companies in order to handle these risk factors. Top managements of the companies taking rapid action in cooperation with CFO’s strategy-wise, tactical-wise and operation-wise. One of the most striking findings regarding the risk factors is the increasing labor costs that was previously on the fifth place with a 31% value which fell down to the ninth place with a 3% value in the last survey. This is because the increase of the minimum wage was conceded by the companies and other factors gain more emphasis in their agenda. On the contrary, cost of material remain as a significant risk factor. Moreover, the rise of the commodity and oil-gas prices after a long period supports this view. In comparison to the first quarter findings the shrinkage of the foreign demand is evaluated as a weaker threat in this quarter. Companies anticipate a more positive period ahead in terms of export. When it comes to the companies’ strategic priorities, CFO’s put defensive actions on top. Just like the previous report controlling the costs and reducing the costs take the first two places. Like so improving the profitability is aimed. A significant fact in strategic priorities is that firm acquisitions stand out in the third quarter. This is because the economic conditions provide an appropriate setting for companies pursuing such an investment. Starting the year, CFO’s maintained an abstaining position against taking loans from the banks. Only 38% of the CFO’s had a favorable approach about taking a bank loan. Now this percentage dropped down to 26%. During the period the survey was carried out circumstances such as the expectancy of the decrease of the domestic interest rates, upward trend of the foreign currencies, accumulated debt stock of the companies, companies’ caution on the expansion, and the instability of the economic climate left debting out of the agenda. This is not only the case for bank loans. It appears that CFO’s are also restrained about alternative financing tools in the given period. Regarding the increase of capital the restrained stance of the share-holders is another remarkable indicator of this. Let us all see how CFO’s will respond to our next survey…