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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.
Although it is fairly common for a successful business to generate 80% of its profits from 20% of its products, relying heavily on a small number of products, services, or markets exposes a business to significant risk. Diversify Revenue Streams One fundamental strategy for business resilience is to diversify revenue streams.
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.
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. Norwegian encouraged its employees, in other words, to adopt an owner’s mindset: a powerful sense of responsibility for all of their employees, customers, products and decisions.
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
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.
One example of a company that embodies Porter’s approach is Patagonia, an outdoor clothing company, which is committed to creating high-quality products as well as protecting the environment. In 1988, he purchased a large stake in the company, seeing its strong brand, steady cashflow, and long-term growth potential.
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).
Disruptions in the supply chain may affect production processes that depend on unpriced natural capital assets such as biodiversity, groundwater, clean air, and climate. These unpriced natural capital costs are generally internalized until events like floods or droughts cause disruption to production processes or commodity price fluctuation.
70% of medium sized companies will change hands (2008). Notice the same predictions from 2008-2015? Gallup recently released a five-year-long study showing the variance between high and low productivity is 70% attributable to the manager. Synergistic product line firm. Contract manufacturer (of your product).
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.
In November, United States’ crude oil production exceeded 10 million barrels per day for the first time since 1970, according to the US Energy Information Administration (EIA). oil production, up from a mere 10% just seven years ago in 2011. hbr staff/bettmann/Getty Images. Analysts have predicted that U.S.
Our belief is that the earnings of long-term companies will rely less on accounting decisions and more on underlying cashflow than other companies. Most important, what are the interventions that will prove most effective in shifting organizations onto a more productive long-term path? for all other companies.
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