When we think of financial management and money management we generally think of individuals, but companies are also tasked with balancing revenue and expenditures, as well as acquisitions and investments.
That being said, there have been many companies that have famously mismanaged their money to catastrophic ends.
Read on to learn about a few of these companies and what happened.Kmart
Chuck Conway was head of Kmart when it declared bankruptcy, and he was charged with accounting fraud which may have been used to improve the balance sheet.
The company also made some bad investments in companies like Walden Books (which, we know how that one ended up).
Webvan.com obviously had high hopes as a start-up set to hit during the Dot-com Bubble. This grocery order-taking internet delivery boasted 30-minute delivery times, planning to have ops in 26 cities. But Webvan.com never got beyond 10 — and most of these on the West Coast. Webvan ended up spending $1.5 billion in a year and a half starting in the year 2000. It declared Chapter 11 in 2001, never taking off as it once promised.
Sopwith Aviation Company
You may have heard of the Sopwith war plane (made by Sopwith). Sopwith is a company that simply failed to adjust to the civilian world after its usefulness in the great war. Sopwith’s military mindset problems were compounded by charges the company faced, that Sopwith made exorbitant earnings on wartime enterprises, which eventually were punished by punitive anti-profiteering taxes. Ouch!
Lastly, as an honorable mention, consider Apple — only we’re talking about Apple under John Sculley, who spend large sums of money in expensive marketing campaigns after firing Steve Jobs. Sculley also had insufficient product management skills (to say the least), investing heavily countless failed ventures like Apple’s Newton (an early PDA-like device), multiple cameras, as well as CD Players.
See, not even companies are immune to mismanaging money. Come to this site frequently and often to learn the latest about wealth management and accounting from Michelle Marquez.