Access over 35 million academic & study documents

Bankruptcy Case

Content type
User Generated
Subject
Business
School
Northwestern College
Type
Homework
Rating
Showing Page:
1/5
Bankruptcy Case
Student’s Name
Course
Date

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/5
2
Bankruptcy Case
1. Which mistakes were most responsible for the downfall?
The first mistake that led to the downfall of the company was their investment in non-
core and non-generating divisions. TAMI invested much in non-core divisions (software), that
likely led them astray from the organization's core values of operation. The company chose to
make an investment in a field that none of their employees or the management knew about. They
decided to diversify their services to a sector that was unfamiliar to them and led to their
divergence for the core operations of the business. Therefore, these resulted in a lack of sales
within the organization due to their lack of product creation and also disarrayed within the
organization.
Another factor that likely caused the downfall of the organization was outside command
forces. Some of these factors could have been poor leveraging of the company's debt and the dot
com bubble bursting. The lack of accurately defining their debt and equity balance led to their
downfall. How leveraged an organization is likely to be is determined by its debt/equity ratio
1
.
For TAMI, their ratio, as illustrated in Table 1 below, was determined to be over one throughout
their operation. Thus, it could be concluded that the organization was leveraged, and there might
have been a higher risk of carrying an investment in such an organization than within
organizations that were less leveraged than TAMI.
1
. Carlson, Rosemary. “The Debt-to-Equity Ratio: Measuring Financial Risk.” The Balance
Small Business. The Balance Small Business, January 26, 2020.
https://www.thebalancesmb.com/what-is-the-debt-to-equity-ratio-393194.

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/5

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 5 pages?
Access Now
Unformatted Attachment Preview
Bankruptcy Case Student’s Name Course Date 2 Bankruptcy Case 1. Which mistakes were most responsible for the downfall? The first mistake that led to the downfall of the company was their investment in noncore and non-generating divisions. TAMI invested much in non-core divisions (software), that likely led them astray from the organization's core values of operation. The company chose to make an investment in a field that none of their employees or the management knew about. They decided to diversify their services to a sector that was unfamiliar to them and led to their divergence for the core operations of the business. Therefore, these resulted in a lack of sales within the organization due to their lack of product creation and also disarrayed within the organization. Another factor that likely caused the downfall of the organization was outside command forces. Some of these factors could have been poor leveraging of the company's debt and the dot com bubble bursting. The lack of accurately defining their debt and equity balance led to their downfall. How leveraged an organization is likely to be is determined by its debt/equity ratio1. For TAMI, their ratio, as illustrated in Table 1 below, was determined to be over one throughout their operation. Thus, it could be concluded that the organization was leveraged, and there might have been a higher risk of carrying an investment in such an organization than within organizations that were less leveraged than TAMI. 1. Ca ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
This is great! Exactly what I wanted.

Studypool
4.7
Indeed
4.5
Sitejabber
4.4

Similar Documents