Financial Woes for the New York Times

New York Times Company's reported financial results, outlook, and stock price  keep getting hammered by poor business performance. Having announced it will pay $125 million in dividends, the company must increase its profits if it is to avoid further drawing down of shareholder equity, amounting to gradual liquidation of the company.Last week I wrote about the bond covenants that could be violated if dividends continue to exceed earningsThe prospects are grim. The newspaper industry is in serious trouble. But the Times faces a special challenge in the arrival of Rupert Murdoch as new owner of the Wall Street Journal, not to mention any further problems which might grow out of the MoveOn ad scandal and the regulatory risks associated with the Federal Election Commission and the Sarbanes-Oxley Act. But don't take my perspective by itself. A popular financial tool for analyzing bankruptcy risk reveals much.The Z-scoreA popular tool in analyzing bankruptcy risk is the Z-score...(Read Full Article)

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