Inflation affects businesses in a multitude of ways. Broadly speaking, it is the rise in the prices of goods and services over a period of time. This means that companies need to constantly adjust the prices for their products in order to keep up with inflation and remain competitive. Companies also experience increased costs due to intangible elements such as wages, taxes and raw materials. When these costs increase, profits suffer and businesses will pass these increases onto the consumer. Additionally, inflation can lead to an uncertain economic environment which can make businesses cautious about investing. Thus, understanding how inflation affects business is fundamental to successful management.