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In both 2008 and 2007, an increase in jet fuel prices was the primary reason for higher mainline and United Express fuel expense and aircraft fuel cost per gallon, as highlighted in the table below. billion in 2008. billion during the year ended December 31, 2008. " - United Airlines 2008 10-K, 2 March 2009. at 8:30 PM.
Many an economics and finance course later, I see that the layers of complexities to the 2008 financial crisis are innumerable. The senior slices of a CDO were considered to be safer because they had first priority on cashflows received from the pool of mortgages in the event of default. It all seemed so clear.
In fact, 2018 may mark the first year shale producers will be able to fund future expansions of drilling programs through their own cashflow. By placing upper and lower bounds on price volatility, producers can count on a more certain cashflow. These increasingly efficient survivors now represent half of U.S.
Similarly, considering greater accruals (which represent the difference between reported income and operating cashflows) to measure short-term orientation has its difficulties. It assumes that a smaller proportion of cashflows in earnings indicates a myopic firm.
My strongest and earliest memory of depression and suicidal thoughts occurred in the two years leading up to 2008. In early 2008, it became beyond obvious that the math on the mortgage no longer worked. In 2008, I had failed on every front, and my inner world came crashing down on itself. It was not going well… again. .
Businesses should adopt conservative financial management practices , such as effective cashflow monitoring, prudent budgeting, and building a large war chest of cash and other liquid assets. Build Strong Customer Relationships Customer loyalty can be a powerful asset during periods of economic downturn.
Prior to COVID-19, I have marketed through the Internet Gold Rush, Y2K, the dot-com bust, 9/11, The Great 2008 Recession, and any number of other “irrational” rushes. Marketing agencies don’t need to be talking about cash-flow, CARE or FMLA. There is also a positive ethos of concern and a sincere desire to be helpful.
In 2000, with more than $100 million in negative cashflow, the company agreed to be acquired by Star Cruises, a leading cruise operator in Asia. From 2008 through 2013, EBITDA (earnings before interest, taxes, depreciation and amortization) margins increased for 20 consecutive quarters, from 5% to 25%.
Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cashflow drain from years of problematic acquisitions, divestitures, and buybacks. Because of these dubious decisions, GE’s ratio of debt to earnings has soared from 1.5 in 2013 to 3.7
Most executives know that the present value of an investment comes from projecting its cashflows and discounting those numbers into today’s dollars. The way in which many companies make investment decisions blinds them to this reality. Believing that good entrepreneurs seek out risk. They don’t.
So refraining from any forecast of what will happen in the near term, it’s sufficient to observe that the economic data is not nearly as strong as widely perceived, and the impact of QE on stock prices does nothing to improve the underlying cashflows. December 2008 (85). November 2008 (78). October 2008 (108).
They are seeing first hand how many opportunities are being missed to improve profitability and cashflow just from existing operations alone. This algorithm has been developed since 2008 and has been constantly improved with the input of over 500 consultants working with 15,000+ businesses.
Michael Lewis: Prioritise playing the game ethically Similarly, Michael Lewis, the bestselling author of The Big Short , exposed the unethical and reckless behaviour of some players in the financial industry leading up to the 2008 financial crisis. One example of Buffett’s approach is his investment in Coca-Cola.
70% of medium sized companies will change hands (2008). Notice the same predictions from 2008-2015? Cashflow is king (they don’t require full collateralization, but will take as much as they can). Ten percent buyer down payment (minimum), which frees up cash to grow the business. And guess what?
Here are some other datapoints to consider: Between 2006 and 2010, the top 100 sustainable global companies experienced significantly higher mean sales growth, return on assets, profit before taxation, and cashflows from operations in some sectors compared to control companies.
Our belief is that the earnings of long-term companies will rely less on accounting decisions and more on underlying cashflow than other companies. We assume long-term companies will invest more and more-consistently than other companies. Earnings quality: Accruals as a share of revenue. for all other companies.
It could represent a hidden vulnerability, especially if backed by domestic currency cashflows derived from overextended sectors, such as property, or used for carry trades or other forms of speculative position-taking. Low funding costs and volatility encouraged the search for yield.
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