UF Postings Past: Signs That a Company is in Trouble

I ran across this post by Bill Burnham over on his blog a long while back. The post is about recognizing when a software stock is in trouble. It seemed useful information, even though I do not invest myself, and I have found it useful in about a half-dozen ways since then, so I thought I would share it. Here’s a few reasons you might be interested:

1) When a stock is in trouble, the company itself is often in trouble. This is endlessly useful information for your career, if you happen to work at a technology company. If you work for the company, you may consider polishing your resume. If you are expecting a raise or promotion soon, it may help you get some perspective on possibilities. If you are considering taking a job at a new company, checking it out against these measures may help you decide about the company’s future.

2) Knowing when a company may be in trouble financially can help you manage your relationship with them as a vendor. You may want to be careful of your ties with a company that starts to look like it’s in trouble, and plan your own company’s finances accordingly when determining how to handle any outstanding bills and dealings you have with them.

3) Recognizing when to purchase or not from a given vendor. If you are looking for long-term support for your software, then you may wish to be careful. A company in serious trouble might be purchased or even go under on you later, changing the entire perspective of your relationship with them.

There are numerous other applications as well. Understanding a company’s stock and financial position can help you make an endless number of decisions related to your dealings with that company. No doubt, if you have some business savvy, you can adapt most of the information in this article to businesses other than software as well. This information is fairly universal and valuable in making many kinds of business decisions.

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