Back to School Offer

Get 20% of Your First Order amount back in Reward Credits!

Get 20% of Your First Orderback in Rewards

All papers examples
Get a Free E-Book! ($50 Value)
HIRE A WRITER!
Paper Types
Disciplines
Get a Free E-Book! ($50 Value)

Sears Holdings’ Financial Woes, Article Review Example

Pages: 2

Words: 652

Article Review

Sears Corporation has experienced much financial difficulty in the past months. During the month of December, the company announced that it would close at least 100 of its Sears and Kmart stores in 2012. In the midst of potentially being forced to close some of its stores, Sears Holdings has experienced yet another financial setback. Bloomberg reported that the shares of the corporation fell by 40% on Thursday, January 12, 2012 after CIT Group decided to stop extending loans to Sears suppliers waiting to be paid for goods and services rendered to the company. The financial institution became concerned that vendors supplying goods and services to Sears Holdings may not be paid by the company and hence will be unable to repay loans to its institution. The Group has hence decided to protect its financial standing in denying Sears suppliers credit.

Although Sears did not directly confirm or deny that CIT Group has moved to decline supplier loans, a spokesperson for the corporation did inadvertently allude to possibility of the rumor being true. According to the spokesperson, Sears has more than adequate liquidity and enough assets to withstand financial difficulty. He disagreed with the actions of CIT and assured investors that Sears has been minimally affected by the decisions of the financial institution.

Regardless of its assurance, many investors are not taking a chance on Sears corporation. Since the CIT announcement, several investors have cashed in on their stock and many have refused to purchase new shares. Although the company has done everything within its power to avoid bankruptcy, some financial specialists predict a 10-15% chance of the corporation filing for Chapter 11 protection.

While bankruptcy is not the best option, it may be a positive move for Sears Holdings. According to its financial statements, the corporation has valuable real estate that helps in bringing its liquidation value to $4.2 billion. The market value of the land alone would positively impact the debt of the company. Although many companies try to avoid bankruptcy at all costs because the book value of assets is larger than net worth, Sears is not like the average company. While currently in financial turmoil, Sears has a long standing history of consumer success. Many shoppers have trusted the corporation to give them the best quality in tool supplies and flock to community stores to purchase large kitchen appliances. Although not recognized as a corporation that has the latest in fashion, Sears has led the way in big ticket items for decades. Such leadership has positively affected the market value of the corporation.

Although the net worth of Sears attracts investments, recent cash flow statements of Sears has turned many investors away. By definition, a cash flow statement is a report that outlines the raw finances of a business. In contrast to a balance sheet or income statement that lists prospected income, cash flow statements do not include credits. Such data greatly influences the decision of an investor to purchase or bypass stock. Whereas a company that exhibits strong cash flow will breed more investments, a business showing instability in the statement may lose money. During the past several statements, Sears Holdings has shown so much instability that many investors choose to remove the company from their portfolios. Although the decision of CIT Group to no longer finance suppliers was notable, the inability of Sears to maintain good cash flow is what has led to current financial problems. In order to regain its clientele of investors, Sears must prove that it is more than capable of standing on its own two feet without the help of prospected credits.

Sears is a corporation that has a long standing history with the American people. Many consumers have become accustomed to shopping at community stores for everyday needs. Although an icon, Sears Holdings much make drastic changes to improve its cash flow to rectify its current financial problems without having to file for Chapter 11 bankruptcy.

Time is precious

Time is precious

don’t waste it!

Get instant essay
writing help!
Get instant essay writing help!
Plagiarism-free guarantee

Plagiarism-free
guarantee

Privacy guarantee

Privacy
guarantee

Secure checkout

Secure
checkout

Money back guarantee

Money back
guarantee

Related Article Review Samples & Examples

Dissemination of Information in Poland, Article Review Example

Laws protect the rights of citizens of any country. Therefore, spreading information about the law is important because it will ensure that everyone who gets [...]

Pages: 2

Words: 587

Article Review

Effect of Therapist Colour-Blindness on Empathy, Article Review Example

Alan Bukard and Sarah Knox tackle a sensitive and important issue in the field of psychology. They postulate that cross-cultural; counselling is considerably affected by [...]

Pages: 3

Words: 877

Article Review

Project Management in the Library, Article Review Example

The authors of the article underscore the importance of defining the project and project management. Upon understanding the distinction between project and project management, then [...]

Pages: 6

Words: 1703

Article Review

A Systems Approach to Planning, Scheduling, and Controlling, Article Review Example

Background of the Study The article “Reducing Project Duration looks at a case where Tarunsoftech Private Limited (PTL) had been experiencing considerable reduction in the [...]

Pages: 6

Words: 1743

Article Review

The Role of Project Management in Achieving Project Success, Article Review Example

Introduction Project management is the process of defining the ways by which a team or a person is in need of following in order to [...]

Pages: 9

Words: 2455

Article Review

White British and Asian-Indian Older People in Britain, Article Review Example

This article addresses the significance of support relative to different levels of exposure, including community-based support that involves social networks and the ethnicity of a [...]

Pages: 8

Words: 2091

Article Review

Dissemination of Information in Poland, Article Review Example

Laws protect the rights of citizens of any country. Therefore, spreading information about the law is important because it will ensure that everyone who gets [...]

Pages: 2

Words: 587

Article Review

Effect of Therapist Colour-Blindness on Empathy, Article Review Example

Alan Bukard and Sarah Knox tackle a sensitive and important issue in the field of psychology. They postulate that cross-cultural; counselling is considerably affected by [...]

Pages: 3

Words: 877

Article Review

Project Management in the Library, Article Review Example

The authors of the article underscore the importance of defining the project and project management. Upon understanding the distinction between project and project management, then [...]

Pages: 6

Words: 1703

Article Review

A Systems Approach to Planning, Scheduling, and Controlling, Article Review Example

Background of the Study The article “Reducing Project Duration looks at a case where Tarunsoftech Private Limited (PTL) had been experiencing considerable reduction in the [...]

Pages: 6

Words: 1743

Article Review

The Role of Project Management in Achieving Project Success, Article Review Example

Introduction Project management is the process of defining the ways by which a team or a person is in need of following in order to [...]

Pages: 9

Words: 2455

Article Review

White British and Asian-Indian Older People in Britain, Article Review Example

This article addresses the significance of support relative to different levels of exposure, including community-based support that involves social networks and the ethnicity of a [...]

Pages: 8

Words: 2091

Article Review

Get a Free E-Book ($50 in value)

Get a Free E-Book

How To Write The Best Essay Ever!

How To Write The Best Essay Ever!