Summary:
In this article, Canwest Global Communications Corp.’s second quarter results are being highly affected by global economic pressures. Within all of their aspects of revenues and generating income they have suffered losses to some degree. A couple substantial losses faced by Canwest include their operating profits which fell from $109 million to $75 million in the span of a single year. Also, their publishing operations had a net loss of $1.436 billion. After concluding all these amounts, Canwest’s president and CEO (Chief Executive Officer), Leonard Asper stated that although they are facing troubles due to the economy, their local television stations and underlying businesses were able to produce $295 million in operating profits. Along with this, Canwest has merged and have contracts with other companies which have increased operating profits and a higher percentage audience. In conclusion, the economy played a large factor in this company and because of all of its losses; investors in Canwest have brought the share price down 1.5 cents, and is now trading at about 30 cents.
Connections:
The connections I was able to make between this article and Chapter 5 are direct. Basically, Canwest’s cash flow has dropped a significant amount in almost every aspect of their business which can be blamed on the economic downturn that is currently present. The importance of cash flow is great and can be affected by numerous things, and in this case it is our economy that plays the biggest role. Although, their losses are quite large, they are still bringing in a reasonable amount of cash from smaller companies and businesses. Even through all the negatives of Canwest business, president and CEO, Asper is standing tall because he understands that these losses can be overcome and is already taking to proper procedures to do so. The main point I am trying to get across is that Canwest recognizes they have a problem with their cash flow and recognize that it is not too late to turn things around as is the case with any business.
Personal Reflection:
My insights on this article is that Canwest is not coming up to par with its usual standards but I also believe Asper is taking the leadership that will take them back to their spot. The worst thing a company can do in a situation like this is not take any action or continually put the blame on someone or something else so that they do not have to do anything. However, they do put some towards the economic state but so does everyone and they have the right to do so as it is affecting all of us. In my opinion, a great thing Canwest is doing is looking to their smaller companies to see what profits can be squeezed out of them for time being until they can recover on a larger scale. It is wise that they are not solely relying on one or two large profit organizations but instead have many scattered across our nation. Finally, I have no doubts that Canwest will succeed once again and reach great heights but it will only take time.
- Jason K.
