Summer Shorts

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This week I had hoped to be on a beach. Not sure if that’s going to happen, but here are two beach-appropriate short reads. Please consume while wearing flip-flops:   I. Capping CAPM A Google search on the Capital Asset Pricing Model returns over 1.2 million hits. This model, taught in finance courses as “Cap-em,” indicates that […]

The Guaranteed Middle Market Employment Stimulus Plan

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Further stimulus of the economy is required. The 9.2% national unemployment rate, leaving 14 million able workers at home, demands it. But there is no appetite to revive the Obama administration’s fiscal stimulus, which apparently intended to give states block grants to keep doing what they were doing, or to provide nimble political ear-markers with […]

What it Really Takes to Turn a Business Around

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I have been doing turnarounds for over twenty five years, and along the way, I’ve accumulated certain prejudices about what types of businesses are easiest to fix. Wholesale distribution and retail/restaurant chains are among my favorites, because there are usually enough profitable parts of the business — a core product or very profitable locations — […]

Let’s Make a Dealership

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We know the problems of auto dealers (and their lesser-known big brothers, truck dealerships) all too well. Low sales, collapse of financing markets and a seemingly inexplicable urge of car companies to decrease, rather than increase, the number of dealers’ outlets. These are the problems that have hit the news, but a vibrant auto dealership […]

The Five Rules of Workout

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Because last year’s recession caused such a sudden depression in demand, some middle-market businesses have seen revenue declines of as much as 30-35%. Many of these businesses are still losing money and are close to exhausting their financial reserves. These companies’ banks are receiving the end-of-year financial reports and deciding whether the results meet contractual […]

Save Fritz Henderson!

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Well, perhaps not literally. An alternate title could be “Save GM from Itself.” But General Motors itself is not news, of course, and that title would miss the lovely phrase “Fritz Henderson.” The guy may be out of a job now, but he can almost certainly find employment if there is ever an opening for […]

Can troubled companies “grow out” of their cash flow problems?

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  When I meet managers of companies who have been having problems with the bank—as in, “we-want-our-money-back-now” problems—often the CEO will take me aside and confide that the real problem is that the bank “distraction” is preventing the company from executing the firm’s long-contemplated growth strategy.   The CEO has a geographic expansion in mind, or […]