I am in the process of writing a post on corporate finance, and have been doing some research into debt levels and leverage.
It’s part of an effort to understand more about companies, and specifically to answer the question of why quite a few companies have been struggling to get through the crisis.
There are two important aspects: (1) high leverage has meant that even a relatively small drop in customer spending gets magnified to the point where it poses serious risks to the financial viability of the company, (2) consequently it has been difficult for many companies to refinance their debts and many have failed.
Interesting stuff, I’ll complete the post soon.
Here I just want to post a link to an online history of Woolworths that I have found.
Woolworths is a great example of a business which pretty-much everyone in the UK is familiar with: a big, unglamorous shop in most towns which sold inexpensive toys, sweets, household goods, children’s clothes and suchlike.
Basically Woolworths was a ‘sell everything’ kind of store, easy to describe, nothing complicated. Woolworths had existed in the lives of everyone’s grandparents, in the lives of everyone’s parents. Your local Woolworths provoked no questions.
But browse the history, and you get a good sense of how your local Woolworths was actually just one small part of a long history of corporate actions. Perhaps it was sometimes even a very minor part of that history.
Click here to visit the Museum of Woolworths.
Compliments to the persons that produced the site, it gives an important historical insight into the forces at work in the modern economy.