"Likely the most direct impact inflation is having is increasing input prices, which puts a squeeze on companies' margins if they are not able to raise their output price. Certainly, this is a key worry for many businesses during times of rising inflation. Beyond margins, inflation impacts many other key metrics we use to measure financial performance as asset prices rapidly increase along with overall revenues as prices increase. Thus, it may be hard to tell if a ratio is deviating from trend due to business performance factors, if this is a result of inflation, or both. Additionally, inflation erodes purchasing power and raises the cost of debt."