by Ron Carleton | Feb 25, 2009
Why does a company go bankrupt? We often point to factors such as the economy, high leverage, bad management, falling asset values, or strong competition. While all of these can be contributing factors, ultimately a company will file a bankruptcy petition when it...
by Ron Carleton | Feb 19, 2009
For many companies, financing an acquisition is a two-step process. The long-term strategy might call for raising cash using syndicated term loans and revolvers, bonds, equity, and asset sales. However, many companies use bridge loans to initially fund acquisitions,...
by Ron Carleton | Feb 12, 2009
We mentioned the absence of early warning signs in our earlier post on Satyam – especially the lack of a gap between earnings and cash flow. It turns out there were a few. We can classify them either as behavioral or financial. Behavioral Warning Signs Behavioral...
by Ron Carleton | Feb 4, 2009
It’s the biggest corporate fraud in Indian history, and the press labeled it “India’s Enron” as soon as the news broke. But Satyam looks to be worse than Enron in scope, if not in scale. How can we say that before the authorities have completed their investigation? We...
by Ron Carleton | Jan 26, 2009
Over the past 15 year, many businesses have adopted sophisticated inventory tracking systems and just-in-time inventory policies. As a result, they have gotten much more efficient in their use of inventory, as shown in this chart: Source: Wachovia Economics This...
