There is a recent trend where good people have found themselves in ortho companies with poor financial health. Often they are blind-sided with a RIF, or asset sale of the company, or an acquisition of the entire company. Good people call me to say that they had no idea that their employer had financial issues. Shame on them.
My advice: Employees of public companies should read every quarterly statement and also listen in to the quarterly earning calls. It's harder for employees of privately held companies to get this information. Private employees will have to ask to see financial statements such as annual income statement, balance sheet and cash flow statement.
Below are examples of all three financial statements from Apple. Study, read and understand these statements.
7 warning signs your employer may have poor financial health.
1/ Debt
Understand the debt burden at your company.
As with your personal finances, there is a tipping point for your business between acceptable and unacceptable debt. There are two specific ratios to measure: the debt-to-equity ratio and the debt-to-assets ratio.
Debt-to-Equity Ratio : You’ll need to know how much debt your company owes and how m...
