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Overleverage is Why Banks Shouldn’t Think Like Investors

Martinka Consulting

On April 5 the Wall Street Journal had a frontpage article titled, “ Small-Business Owners Feel Weight of Personal Debt Guarantees. While it wasn’t all about bank loans, a large portion of the article was about lease guarantees, as I’ve previously written personal guarantees are common with small-business bank loans. .

Banking 40
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Martinka Consulting - Untitled Article

Martinka Consulting

A December 2, 2016 Wall Street Journal article was titled, “ Car Sales Roll Along; Aided by Discounts.*” The gist of the article was sales are up over the same month a year earlier and the average discount was 11%, versus 9.4% He knew cash flow. Or should we say he knew short-term cash flow.

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Fool Me Once Or Fool Me All The Time

Martinka Consulting

On June 2, 2018 Jason Zweig’s article in the Wall Street Journal was titled, “ The Fanciful Alphabet Soup Companies Use to Fool You.” The premise of the article was most of the financial jargon used to provide insights into companies’ health are make-believe and don’t reflect actual conditions, i.e. true profitability.

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Financial Shenanigans Versus Incompetence

Martinka Consulting

The Wall Street Journal and others recently reported about an accounting expert who had predicted the Madoff Ponzi scheme and recently went after GE for what he said are their deceptive accounting practices (of course, GE responded this person didn’t know what he was talking about).

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Transitioning from Management Consulting to Corporate Strategy/M&A – the Interview Process

Tom Spencer

According to the Ivey Business Journal it has two parts: Improving the competitive strategies of operating units by capturing inter-divisional synergies; and. discounted cash flow (DCF)) and to check if the M&A between two companies would result in an accretive or dilutive situation. What is corporate strategy? Conclusion.

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Economies of Scope - Tom Spencer consulting blog

Tom Spencer

ECONOMIES OF SCOPE is an idea that was first explored by John Panzar and Robert Willig in an article published in 1977 in the Quarterly Journal of Economics entitled “ Economies of Scale in Multi-Output Production ”. More stable cash flows are attractive for three reasons.

Cash Flow 117
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Strong Economy – Strong Buy-Sell Market

Martinka Consulting

Wall Street Journal – The greatest transfer of wealth in history will occur in this country over the next decade; an estimated $10 trillion is expected to change hands, and much of this wealth is tied up in family businesses. Cash flow is king (they don’t require full collateralization, but will take as much as they can).