There may come a time in 2010 when we have the distinct pleasure of producing an entire issue of CFO that does not contain the word recession. But not yet.
Our annual look at working capital performance, for example, can't help but focus on the lingering impact that the recession continues to have on all the components that make up working capital, from inventory to days sales outstanding. As our New York bureau chief, David M. Katz, notes in "Working It Out," companies moved quickly to shore up working capital as soon as the economy headed south, and are now paying a price as inventory levels adjust and payment terms revert to more-conventional time frames. Performance across all industry sectors was as poor as we've ever seen it, but some companies bucked the trend. We'll explain how.
A similar story unfolds in "From Adversity, Better Budgets," in which several CFOs admit that the recession nearly caused them to scuttle the entire budgeting-and-planning process altogether. Instead they made changes on the fly, and as senior editor Kate O'Sullivan learned, many finance chiefs now say that their revised processes will serve them well going forward.
Even in the nightmarish world of bankruptcy, the recession has inspired one positive change — namely, speed. The fast-track approach that characterized the Chrysler bankruptcy now constitutes a "new normal" for companies entering Chapter 11. That is mostly a good thing, but as senior editor Vincent Ryan points out in "Breezing Through Bankruptcy," there are situations in which it is wise to take a slower course.
We balance those three stories of useful lessons learned with a look at a business segment that seems immutable to change: the credit-rating agencies. Despite the universal excoriation they received in the wake of the Wall Street meltdown, the agencies seem poised to carry on much as before. Will pending legislation make a difference, or are there structural problems at the root of this morass that all current proposals fail to address? Contributing editor Randy Myers brings you up to date in "Ratings Disaster."