I feel that inflation deserves a more detailed analysis because of the complicated ways in which it affects businesses. Let me explain abit; During inflationary period the currency loses value which cause all the securities denominated in that currency lose value. In case of long term debt the impact may be even higher because the central banks resort to increase in interest rates to check the inflation which depresses bond prices. The real assets like properties,are less vulnerable to inflation because their nominal values rise along with inflation. EFFECT OF INFLATION OF BUSINESS A) Inflation tends to increase the prices of assets like real estate, plant and machinery which directly adds to the nominal value of existing stock of capital. B) Inflation and its effects on asset prices. The fall in the value of currency decreases the indebtedness of the company. Let's enumerate the detrimental effects of inflation on business C) Inflation affects the consumer demand because of increased cost of living which may not be offset by a rise in monetary wages. D) Inflation increases the working capital requirements to manage the same level of output. This affects working capital intensive businesses like retail in a big way. E) Any increase in monetary wages due to inflation can lead to rise in operating cost which is risky because monetary wages tend to be sticky and may not decline as situations change. F) In a competitive environment the businesses may not be able to pass costs to the consumers.

>> comprehensive. kudos.