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Just like you never want to hear a doctor say "oops" in the operating room, you never want to see a going-concern statement
in a financial report about a company you own. Accountants throw these in when they've been over the books, talked to customers,
and checked the horoscopes and have concluded there is "substantial doubt" about a company's ability to remain in business.
In short, don't blame the accountants if the company files for bankruptcy protection.
You¿d reckon that a going-concern
statement would be enough to send investors running to the exits, but it's not. True, many large institutions automatically
bail when an existing company gets slapped with one of these, but many individuals (often wrongly) take a chance they know
more than the bean counters.
During the tech boom of the late 1990s, many companies actually went public even though they had been hit with going-concern statements. Many of those companies subsequently disappeared. Enough said.
Home / Markets / Economy
Thursday, July 17, 2008
Jobless Claims Rise by 18,000 in Latest Week
Associated Press
The Labor Department reported Thursday that new applications filed for unemployment insurance increased by a seasonally adjusted 18,000 to 366,000 for the week ending July 12. That left new claims at their highest level since late June, when they spiked to 404,000.
The number of new layoff filings was lower than the 380,000 that economists were forecasting. Yet, the filings are higher than a year ago, when they stood at 309,000, underscoring weakness in employment conditions.
Meanwhile, the four-week moving average of claims, which smooths out week-to-week fluctuations, dipped last week to 376,500. A year ago, this figure was 312,500.
The number of people continuing to draw unemployment benefits fell to 3.1 million for the week ending July 5, the most recent period for which that information is available. That compared with 2.6 million a year ago.
Several companies that announced job cuts in July include: Tribune Co.; American Airlines; IndyMac Bancorp Inc.; Cardinal Health Inc.; and Pfizer.
Cautious employers have cut jobs for six months straight bringing total job losses to 438,000 so far this year, the government reported earlier this month.
The jobless rate held steady in June at 5.5% after jumping in May by the most in two decades. The unemployment rate is expected to climb to 6% or higher by early next year.
Federal Reserve Chairman Ben Bernanke, in back-to-back appearances on Capitol Hill this week, told Congress that the economy is facing numerous difficulties, including rising joblessness and fallout from the housing and credit crises. High energy prices also add to the economy's woes.
All those forces are making companies hunker down when it comes to hiring and in making new capital investments.
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