54 Billion Dollar Loss?
-
AOL apparently lossed 54 BILLION dollars. I'm confused. What exactly did they loose? I seriously don't see how a company which is loosing so much money can continue in existence. But I'm a programmer, not an accountant. Can someone please explain this? Or, can we look forward toa bright future where AOL is no longer a 500 pound chiwawa?
-
AOL apparently lossed 54 BILLION dollars. I'm confused. What exactly did they loose? I seriously don't see how a company which is loosing so much money can continue in existence. But I'm a programmer, not an accountant. Can someone please explain this? Or, can we look forward toa bright future where AOL is no longer a 500 pound chiwawa?
It's an accounting trick to account (partially) for the fact that their merger with Time Warner is now considered to be worth a lot less than it was when it occured. This way they puke it all out at once so to speak, instead of burping for the next x years... --------_**
And we die young. Faster we run.
**_
Alice in Chains, We Die Young
-
AOL apparently lossed 54 BILLION dollars. I'm confused. What exactly did they loose? I seriously don't see how a company which is loosing so much money can continue in existence. But I'm a programmer, not an accountant. Can someone please explain this? Or, can we look forward toa bright future where AOL is no longer a 500 pound chiwawa?
Most of the loss was from the one-time charge of $54B from the AOL/TimeWarner takeover. From CNN: "Excluding the charge and other items, AOL Time Warner (AOL: Research, Estimates) logged a profit of $2.05 billion for the quarter, up from $1.9 billion a year earlier and slightly above most forecasts by Wall Street analysts. Earnings before interest, taxes, depreciation and amortization, also known as EBITDA, are watched by Wall Street for companies with unusually heavy debts or capital costs. "Sales rose 4 percent to $9.8 billion from $9.1 billion and were in line with expectations. AOL Time Warner owns Time and Sports Illustrated magazines, the Warner Brothers film and record companies, CNN, HBO and other cable TV operations, as well as CNN/Money." /ravi "There is always one more bug..." http://www.ravib.com ravib@ravib.com
-
It's an accounting trick to account (partially) for the fact that their merger with Time Warner is now considered to be worth a lot less than it was when it occured. This way they puke it all out at once so to speak, instead of burping for the next x years... --------_**
And we die young. Faster we run.
**_
Alice in Chains, We Die Young
It's not an accounting trick but an accounting rule on writing assets to fair market value (part of the merger process between AOL and Time Warner). The real stinker here is that their stock price is in the toilet. X| In 52 weeks AOL-Time Warner stock has gone from $58.51 to $18.82 per share. Wall Street has voted that the merger was a bad idea. I think AOL will be spun-off by the end of the year.