financial indicators

August 2 could determine the fate of Northern Colorado’s economy

Northern Colorado’s economy has slowly been struggling to recover along with the economy across the nation. Each day has been a struggle for individuals and businesses across the area and every little victory is appreciated. Any kind of step backwards could cause undue financial distress for Colorado residents already barely making ends meet.

Residents of Colorado anxiously await the result of the federal government’s debt crisis discussions with a deadline date set for next Tuesday, August 2, 2011. According to experts, a failure by Congress and the Obama administration to come to an agreement could cause just the kind of setback residents will not be able to face.

Should the United States go into default, it will have an effect on so many areas that could have serious financial impact on Colorado businesses and individuals including: credit card interest rates, Social Security payments, federal employee’s paychecks, bonds, adjustable rate mortgages and so much more.

A few days of an impasse may not be unrecoverable, but the experts suggest that if it goes on very much longer, whatever progress the economy has made will be quickly forgotten. The Colorado economy could see the start of a whole new recession.

The negative effects of a failure to agree can be guessed at, predictions can be made and estimates can be calculated, but no one really knows how far the ripple effect will go. While some people may be able to fight for a few months, most have already tapped their financial reserves.

Source: Coloradoan, “How debt crisis could impact Northern Colorado’s delicate economy,” Pat Ferrier, 28 July 2011

10 Major Businesses Who May Face Bankruptcy: 2

In the first post of the series, 10 MajorBusinesses Who May Face Bankruptcy, we mentioned a study conducted by TheStreet, that studied major corporations to find and name those that may be closer to bankruptcy than consumers may think. The first corporation on the list was Borders Books, the once popular book seller.

Next on the list for a corporation who may soon consider whether or not they should file for Chapter 11 bankruptcy, is RiteAid. Researchers for the study cite continuing losses, dating back to 2007. The corporation has shown growth in stock prices since the fall that they suffered last year, but researchers say that the increase is not enough. They say that the current trading value is still under a dollar, a value that does not help the corporation already in debt.

Time Warner was listed as a company that will probably find alternatives to bankruptcy but are in a position that makes filing for bankruptcy a continuing possibility. According to the study, DVD sales have seriously declined, and competitors in joint ventures with companies like Hulu and Netflix significantly cut into their profits.

Barneys New York may be known for a high fashion shopping experience, but the memory of their 1990 bankruptcy filing is still fresh. Its parent company, Istithmar World Capital, was known to have provided $950 million in 2007 as necessary funding to keep the corporation alive.

Alcatel-Lucent, Sirius-XM and Jamba Juice also made the research study’s list of 10 corporations that could face bankruptcy in the near future.

Source: The Street “Companies That Could Go Bankrupt – Opinion” Jason Notte 12/17/10

10 Major Businesses Who May Face Bankruptcy

We have been following the Blockbuster Inc. bankruptcy case for a while, discussing the financial struggles the company has faced due to not only the economic downturn but technological advancements as well. Blockbuster is an example of how the economy is just one of the many factors driving several businesses to file for Chapter 11 bankruptcy protection.

While the economic downturn is not the only factor driving the large corporation into financial crisis, Blockbuster Inc. is not the only large, once dominant corporation to feel financial strain and seek possible bankruptcy protection. Other major corporations have shown signs of financial struggle.

Researchers with TheStreet news sourced delved into the balance sheets, share prices and other financial indicators to study other major corporations that may be seeking alternatives to bankruptcy or considering the possibility. The researchers named 10 large businesses that they say have fundamental flaws in their business plan or questionable management programs that may have allowed them to survive through the past five years, but have made them turn from thriving businesses to possible candidates for bankruptcy protection.

For years, Borders bookstores provided consumers with an experience. Many would enjoy the coffee cafés found in a large number of their locations while browsing through the thousands and thousands of books on stock. Technology seems to be a culprit in the financial struggles at Borders as they are forced to compete with Amazon and other electronic reader media providers. In fact, the companies CEO voluntarily left his position for another, already bankrupt A&P.

Borders is just one of the 10 corporations identified in the study. In the next posting, we’ll list the rest and discuss some other indications of financial struggle.

Source: The Street “Companies That Could Go Bankrupt – Opinion” Jason Notte 12/17/10