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How to manage a balance-sheet in troubled times

The Economist LogoThe Economist2 mo ago

How to manage a balance-sheet in troubled times - The Economist

Quick Summary:

At the same time, new debt issuance has slowed and yields on American corporate bonds rated bbb, the lowest and most frequent investment-grade rating, have risen to 5.1%, up from an average of 2.4% in 2021.

This creates additional cash headwinds as working capital (calculated by subtracting what firms owe suppliers from the value of their inventories plus what they are owed by customers) is increased.

Average indebtedness for members of an index of investment-grade bonds (excluding those issued by financial firms) compiled by Bloomberg, a financial-data firm, has risen to three times earnings before interest, tax, depreciation and amortisation (ebitda), from 1.6 times in 2010.


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Article Details

Category: EconomyFinance

Topics: Companies Firms Dividends Corporate American Interest Cfos Capital Profits Shareholders Debt

Source Website Secure: Yes (HTTPS)

News Sentiment: Negative

Fact Checked: Legitimate

Article Type: News Report

Published On: 2022-07-19, 20:47:32

News Timezone: GMT -5:00

News Source URL: economist.com

Language: English

Reading Time: 8 minutes read

Article Length: 1307 words

Coverage Area: United States

Availability: Desktop Web, Mobile Web

News ID: 65610

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About The Economist

The Economist Logo

Main Topics: EconomyFinance

Official Website: economist.com

Update Frequency: 2 posts per week

Year Established: 1843

Headquarters: United States

News Last Updated: 16h ago

Coverage Areas: United States

Ownership: Independent Company

Publication Timezone: GMT -5:00

News Language: English

RSS Feed: Available (XML)

Website Security: Secure (HTTPS)

Publisher ID: #36

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