Large Corporations Are Worried about Money Now
Corporate America and the economy
Because companies had difficult times managing in the recession of the past year, they are now having an equally difficult time dealing with money now. Although Corporate America is hopeful, there are still signs that it will take more time and recovery efforts to return the industry to its former operating status. Financial risk is still a major concern for executives. Last year there were 207 bankruptcy filings in the world of publicly traded companies. If there is a double-dip recession, 2010 could very well be a year of added disaster for the business world.
Companies in trouble
When it comes to predicting companies that may close or suffer great losses in 2010, it is an easy science. For example, if a company experiences a huge loss due to expansion, that is a sign of possible disaster. Experts predict that companies trying to stretch budgets for expansion may not see the profits needed to pay for the expansion and continue growth. Here are some companies that are not in good financial positions for 2010 and the reasons experts are watching their performance closely.
- Eastman Kodak. Eastman Kodak is a photography company that transitioned from film to digital media. The move was costly and sales recently declined by 26% and the company posted a $111 million loss. Experts say that expanding a business model, along with the difficult economy, poses a serious threat to the corporation.
- The Bon-Ton Stores. The Bon-Ton Stores are other businesses to watch. The retail industry has had seriously declining sales since early 2009. Executives recently announced a new credit agreement that extends loan maturities on its debt. Experts are saying that request for more time to pay up, may mean that the corporation is unable to pay and manage its money now for daily operations.
- US Airways. US Airways is an airline that has been in trouble for months. The recession caused many people to cut back on travel and all airlines struggled. It already filed for bankruptcy back in 2002 and the continued weak demand for service is straining it more. To mitigate losses the company recently reinstated their complimentary drink service in-flight and began charging for checking extra baggage.
- Westwood One. Westwood One is a broadcasting and cable TV company headquartered in New York. Though the company does have stable revenue, it is still in the midst of reorganizing. It recently announced its intention to cut Larry King Live from its broadcast lineup after 30 years. Experts are saying that may be a sign that the corporation is struggling and looking for ways to cut back.
- Dine Equity. Dine Equity Restaurants’ headquarters are in Glendale, California. The notable move with this corporation is its super-discounting program for customers. The discounts accounted for an overall 4.3% decline in sales in 2009. The company is introducing a new restaurant model to bring in new customers for 2010.
Companies are suffering
Companies are suffering due to the aftermath of the recession. Executives are hoping that 2010 is a year of true market turnaround, but no one knows for sure if that is going to happen or if it is going to happen as smoothly as anticipated. The reality is that big corporations, as well as small ones, are concerned about how to manage money now. They are all taking pains to increase their value to the public, hoping they will bring new customers in to sustain, and hopefully even grow, revenues.