Kodak, as it is commonly known, has been around since 1892, focusing on imaging and photographic materials. Excelling in photographic film for much of the 20th century, the 131-year-old company has struggled in recent years as use of photographic film has slipped. In recent years, Kodak has tried to focus on printers, but ranks fifth globally with a market share of only 2.6%. On Wednesday, it was announced that Kodak is "preparing to seek bankruptcy protection in the coming weeks," sending its stock below 50 cents, a dramatic decrease from when it was nearly $30 back in 2007. In the meanwhile as it tries to prevent Chapter 11 bankruptcy, Kodak is trying to sell patent portfolio.
A look at the financial statements for Kodak confirms its recent struggles. Net income has been in the negative each year since 2007, and most recently in 2010, it incurred 687 million loss. During that year, while the COGS margin stayed around 73%, sales weren't enough to cover even the operating expense. Looking at the balance sheet, there is negative equity as of 2010, as long-term debt made up most of the liability. It's interesting to note that the current ratio is above 1. It is plausible that Kodak prepares for Chapter 11 now while it still has the temporary liquidity to restructure the firm. Equity has been on a downward spiral from 2007 when it was at over 3 billion, to the latest 2010 figures of -1 billion. Cash flow statements show similar trends, as merely cash flow from operations has been on a downward spiral into the red.
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