Pidgley swears by his "old-fashioned" values, and he resisted the lure of borrowing heavily to expand his company during the good times, and kept his balance sheet debt-free.
Effectively we were in the headlines reporting negative earnings, going through a really brutal turn in terms of the balance sheet debt, and at times going through uncertainty in terms of working capital and lines of credit.
The main reasons for this are higher interest payments to keep Network Rail's debts off the government balance sheet, debt write-offs, the costs of a multiorganisation fragmentation of the rail system, profit margins of complex tiers of contractors and sub-contractors, and dividend payments to private investors.
When you look at a retailer like Gap, for instance, you not only need to look at their balance sheet and look at the debt they have, but you also have to consider what their operating leases are since those are really off balance sheet debt.
All the raw ingredients for a strong revival are there: The company has the brand name, 140 years of history, major franchises in big markets such as the U.S. East Coast and a healthy balance sheet (debt is just 50% of A&P's total capital, versus an average for the comparable big chains of 60%).
The 2005 Delta Bankruptcy reduced balance sheet debt to $7.6 billion from over $16 billion.
In 2002, after disclosing $2.3 billion in off balance sheet debt and the indictment of five corporate officials for financial shenanigans Adelphia declared bankruptcy.
Off-balance sheet debts do not come due any time soon, however, and Mr. Cameron, who has pushed most aggressively for budget cuts, may well establish a strong government program to tackle the economic problems.
The Big Five accounting firms are clearly worried, and they are scrambling to come up with a quick fix to improve disclosures of off-balance sheet debts, related-party transactions and market risks relative to commodity prices.
Should Enron lose its investment grade rating, other energy trading companies could curtail their business with the company even further, and Enron could be forced to issue tens of millions of shares of stock to cover off-balance sheet debts that it has guaranteed.
They also all have good balance sheets: debt less than 50% of total capital and interest coverage (earnings before interest and taxes, divided by interest) greater than 1.5.
