Simple Formula to plan FY 20-21

Income Tax Slab Rates & Deductions – FY 2019-20, AY 2020-21 | Max Life

Pandemic has changed all our plans for FY 20-21. Most of the companies have made the plan and need to revisit the initial plan.

Each segment has affected differently and few got advantage also.  Mostly essential goods are not affected much.

One thing was clear - 60 days lockdown. So most business has come to halt for 60 days. 

The simple calculation is 2/12 is not able to recover, ie, 16.66% straight loss.

One is to cover up the loss by doing extra or reduce the cost.

Putting extra effort is the need of the hour, but not sure how the market will react.

Some indication is that it will take 3 months to start the market, which means it is a 25% straight loss.

So if you are in a segment with an operating margin of less than 25% it will be difficult to manage this year in comparison to the previous year.

1. Increasing margin: Need to look for products with margin above 25% to survive this year. 

2. Cost reduction: Plan to reduce cost above 25% so that you will be able to recover the losses

3. Manage your resources: Make sure that all your resources are more effective, output has to be 25% higher than last year. Keep manpower reduction as the last step, because for getting better results we need good manpower.


This is the time to consolidate and collaborate with all the resources in your ecosystem.

Look for short term goals and then improve on that.

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