April 4th, Accounting and Financial Statements:

The recession's (2008-2009) effects on companies' balance sheets.

Well, the economy is a connected piece as a whole. So anything that affects a part of it, might affect another part. When the recession happened, it affects everything in the economy. The financial crisis affects the auto industry dramatically and by observing the balance sheets for some companies, we can see the effects. Almost each car company has been affected from the recession and that the liabilities in their balance sheets are higher than the total assets. Although those companies are recovering now, they still have more liabilities and obligations.

For example:

Ford's balance sheet:

2007: the total assets are more than the liabilities

Assets: 279, 264, 000 - Liabilities: 273, 636, 000

2008: the total assets are less than the liabilities

Assets: 218, 328, 000 - Liabilities: 235, 639, 000

From 2008 to 2010, the total assets for each year is less than the liabilities. This means that there is an obstacle in the financials that need to be solved.

References:

http://finapps.forbes.com/finapps/jsp/finance/compinfo/FinancialIndustrial.jsp?tkr=F