Thoughts on this article…

1. There is a wealth gap in corporations just like people. Corporations are people too!

2. The notion of “Small beats Large” is questionable going forward. It sounds like smaller companies may have difficulty servicing debt while large companies are in better shape. Any negative economic shock will likely hurt small companies more.

3. I’m glad the S&P 500 companies that I own are okay. 🙂

4. Analysts should take a closer look at debt management ratios before any purchase decision, particularly in smaller companies intended for long-term portfolios. Current ratio, debt ratio, times interest earned, EBITDA coverage ratio, to name a few.

-Dr. Moore

The hidden risk to the economy in corporate balance sheets
SF Gate

NEW YORK — America has a debt problem, but it’s not what you think. Yes, the federal government owes trillions of dollars more than it did a few years ago. Yes, Americans are still struggling to pay off mortgages and student loans. But it’s the buildup in debt elsewhere that most worries some experts, and the big borrower this time may come as a surprise: Corporate America. Read the full story

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