Common use of External Environment Analysis Clause in Contracts

External Environment Analysis. The business of providing specialized construction material sales (with a specific focus on the sales of roofing tiles) is a moderately complicated business that has several operations to manage. This section of analysis will detail the overall economic climate and interest rate environment. Management feels that this analysis is often overlooked by many businesses, and as Titan Roof Tiles is in the manufacturing and distribution business – changes in interest rates and the political/economic environment can impact the costs of doing business. Currently, the economic condition in the United States is moderate. The high cost of oil coupled with the sub prime and real estate market issues have led many economists to believe that the economy will remain to have sluggish growth. However, Titan Roof Tiles, Inc. will be able to maintain economically stable operations as the low cost and environmentally friendly nature of the Company’s flagship roof tile product line will be in demand among consumers that need roofing repairs. Inflation is another concern for the Company. As the inflation rate decreases, the purchasing power parity of the American dollar decreases in relation to other currencies. This may pose a significant risk to the Company should rampant inflation, much like the inflation experienced in the late 1970s, occur again. This event may significantly weaken the Company’s ability to develop profitable ongoing relationships with companies that operate internationally. However, the federal banking system has done an excellent job of ensuring that inflation is kept under control. While this is a concern for Management, it is not expected that rampant inflation will occur anytime in the foreseeable future.