The “Big Five” Canadian banks offer investment funds and include Royal Bank of Canada, Toronto Dominion Bank (TD Canada Trust), Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce (CIBC). Let’s explore the best place for you to invest.
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As desire to acquire mounts, so does risk of losses
– canadianbusiness.com
NEW YORK, N.Y. – The word suggests compassion, benevolence. It even sounds nice.
Goodwill.
Mankind needs more of it. But in the financial world, there may be far too much already.
Goodwill is the accounting term for the premium that companies pay when they buy each other, over the value of the actual assets being purchased, such as factories, products in a warehouse and office equipment. Goodwill is the value placed on the intangible, special something about the company being bought — its reputation, perhaps, or its skilled workforce or corporate culture.
Yes, it’s that vague, that subjective, that iffy — and investors don’t really mind, except when it goes bad. If a deal doesn’t work out, all that goodwill is worth less, and the earnings of the combined companies can be cut deeply.
Companies in the Standard and Poor’s 500 index are loaded with goodwill right now — $2.5 trillion worth thanks to a flurry of high-priced acquisitions recently, according to FactSet, a data provider…
Goodwill.
Mankind needs more of it. But in the financial world, there may be far too much already.
Goodwill is the accounting term for the premium that companies pay when they buy each other, over the value of the actual assets being purchased, such as factories, products in a warehouse and office equipment. Goodwill is the value placed on the intangible, special something about the company being bought — its reputation, perhaps, or its skilled workforce or corporate culture.
Yes, it’s that vague, that subjective, that iffy — and investors don’t really mind, except when it goes bad. If a deal doesn’t work out, all that goodwill is worth less, and the earnings of the combined companies can be cut deeply.
Companies in the Standard and Poor’s 500 index are loaded with goodwill right now — $2.5 trillion worth thanks to a flurry of high-priced acquisitions recently, according to FactSet, a data provider…
Some of the worst acquisitions ever, and the billions lost
– canadianbusiness.com
Companies have dug deep in their pockets to buy other companies recently, raising the risk that they’ve overpaid. If true, investors will suffer. Companies would be forced to “write down” their goodwill, an asset on financial statements that represents the premiums paid in deals, and the losses would cut into earnings.
Here are some big acquisitions that didn’t pan out, and the billions of dollars lost:
____
AOL buys Time Warner
Price: $106 billion, 2000
Write-down: $45.5 billion, 2002
At the time, the goodwill write-down led to the largest annual loss for a U.S. company
____
Sprint buys Nextel
Price: $36 billion, 2005
Write-down: $30 billion, 2008
One of the biggest write-downs of goodwill ever as Sprint struggles with the wireless business
____
Microsoft buys aQuantive
Price: $6.3 billion, 2007
Write-down: $6.2 billion, 2012
Nearly all of the purchase price is written down, an admission that Microsoft wildly overestimated the value of the online ad company
____
Hewlett-Packard buys Autonomy
Price: $10 billion, 2011
Write-down: $8…
Here are some big acquisitions that didn’t pan out, and the billions of dollars lost:
____
AOL buys Time Warner
Price: $106 billion, 2000
Write-down: $45.5 billion, 2002
At the time, the goodwill write-down led to the largest annual loss for a U.S. company
____
Sprint buys Nextel
Price: $36 billion, 2005
Write-down: $30 billion, 2008
One of the biggest write-downs of goodwill ever as Sprint struggles with the wireless business
____
Microsoft buys aQuantive
Price: $6.3 billion, 2007
Write-down: $6.2 billion, 2012
Nearly all of the purchase price is written down, an admission that Microsoft wildly overestimated the value of the online ad company
____
Hewlett-Packard buys Autonomy
Price: $10 billion, 2011
Write-down: $8…
