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solidpumar said:
NJ5 said:
Assets? Let's take assets minus liabilities... the real measure of a company's value.

Companies with lots of assets can quickly go bankrupt by imploding under their own weight.


True, but they already survived their worse times 2007-2008 in the worst economic possible.

If they didnt got bakrupt there, they wont now things are shapping up and losses are diminishing.

While the value is important... so is assets for many prediction and forecasts, and they still hold most of their assets after the storm. Having sold only a few factories and some employers let go.

I'm not saying they'll go bankrupt (though it's possible depending on the extent of the recession).

My point is, a company's assets don't determine how resilient the company is. If you subtract the liabilities (i.e. money the company owes), that gives you a better idea.

In the current environment, I'd say cash flow is what really determines which companies are strong. Once cash runs out, you either find more people to sell bonds or stocks to, or you're bankrupt. You can of course sell some of your assets, but in hard economic times that's hard and it doesn't give you that much money, unless you sell off huge parts of your business.

 



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