MBA 564 2004 01A

Appendix 1.2Illustrating Organizational DistressUsing Fortune 500 DataOzzie Mascarenhas S. J.; Ph.D.There is no single definition for corporate distress. Based on Fortune 500 companies data, we offer three operational definitions of corporate distress: a) Highest profit loss in absolute terms; b) Highest loss in Fortune 500 rank from the previous year, and c) Highest percentage loss in sales from the previous year. Accordingly, we present the following data:

Table 1.2.1 lists the fifteen worst organizational distresses among the Fortune 500 of 2002-2003 based on highest absolute loss in annual profits.

Table 1.2.2 lists the fifteen worst organizational distresses among the Fortune 500 of 2002-2003 in terms of highest Fortune 500 rank loss from the previous year.

Table 1.2.3 lists the fifteen worst organizational distresses among the Fortune 500 of 2002-2003 defined by highest percentage sales loss from the previous year.

Table 1.2.4 lists the fifteen worst organizational distresses among the Fortune 500 of 2003-2004 in relation to highest absolute loss in annual profits.

Table 1.2.5 lists the fifteen worst organizational distresses among the Fortune 500 of 2003-2004 assessed by highest Fortune 500 rank loss from the previous year.

Table 1.2.6 lists the fifteen worst organizational distresses among the Fortune 500 of 2003-2004 measured by highest percentage sales loss from the previous year.

Fortune 500 ranks are based on annual sales in dollars. Loss in sales in a given year does not necessarily imply loss in profits for that year. Profit loss may have a lag effect. Moreover, a company losing sales in a given year could still show profits by cutting down on: a) costs of goods sold, b) costs of marketing and distribution, c) costs of administrative overhead, or increase profits by d) selling assets or business divisions, e) collecting accumulated receivables, f) collecting bad debts, g) reducing debt service when lending interest or mortgage rates plunge downwards, and h) by reducing debt payments if domestic currencies appreciate against currencies of creditors. Conversely, profit losses in a given year could also occur by: a) increasing costs of goods sold, b) increasing costs of marketing and distribution, c) increasing costs of administrative overhead, d) selling assets or business divisions below book value, e) increasing accumulated receivables, f) increasing bad debts, g) increasing debt service when lending interest or mortgage rates soar upwards, and h) by increased debt payments when domestic currencies depreciate vis vis creditor currencies.

Hence, there is a very low correlation or overlap of companies in Tables 1.2.1 and 1.2.2 (just one company overlaps for the 2002-2003 data) and between Tables 1.2.1 and 1.2.3, (just two companies overlap for the 2002-2003 data). Similarly, there is little overlap of companies between Tables 1.2.4 and 1.2.5 (only three companies for the 2003-2004 data) and between Tables 1.2.4 and 1.2.6, (three companies for the 2003-2004 data). See Tables 1.2.7 and 1.2.8.On the other hand, since Fortune 500 ranks are defined by annual sales in dollars, worst performance definitions based on Fortune 500 rank loss or percentage sales loss should be closely related. Thus, there is significant overlap of companies in Tables 1.2.1 and 1.2.3 (12 companies for the 2002-2003 data) and between Tables 1.2.4 and 1.2.6 (eight companies for the 2003-2004 data). See Tables 1.2.7 and 1.2.8.

Fortune 500 Corporate Distress in 2002-2003

Under all three definitions of organizational distress, Fortune 500 rank based on annual sales of 2002-2003 is highly and positively correlated with the same rank of 2001-2002. See Table 1.2.9. Fortune 500 Corporate Distress in 2003-2004

Under all three definitions of organizational distress, Fortune 500 rank based on annual sales of 2003-2004 is highly and positively correlated with the same rank of 2002-2003. See Table 1.2.9.

Under all three definitions of organizational distress, several key performance variables (e.g., sales, profits) show negative and significant correlations with profit ratios (e.g., ROA, ROS, ROE, and EPS). For details, see Table 1.2.10.Table 1.2.1: The Fifteen Worst Organizational Distresses among U. S. Companies of 2002-2003 based on Profit Losses[Source: Compiled from Fortune, April 14, 2003, pp. F1 F20]

Company,

Headquarters

(Rank 2002, Rank 2001)

(Rank loss/gain)2002 Sales

($ billion)

(% from 2001)2002 Profits

($ billion)

(% from 2001)Rank in Profits Loss

2002 Assets

($ billion)

(Rank)Market Value

($ billions)

(3/14/03)

(Rank)ROS

ROA

ROEEPS 2002

(% change from 2001)

AOL Time Warner,

New York, NY

(29, 37) (+8)41.780

(9.3)(98.696)

(---)495115.450

(35)49.753

(35)(236.2)

(85.5)

(186.9)(22.15)

(---)

Qwest Communications

Denver, CO

(121, 102) (-19)15.487

(21.6)(35.913)

(---)49431.228

(113)6.493

(221)(231.9)

(115.0)

(---)(21.35)

Clear Channel Communications,

San Antonio, TX

(219, 243) (+24)8.421

5.7(16.054)

(---)49327.672

(125)21.537

(73)(190.6)

(58.0)

(113.0)(25.56)

(---)

AT&T,

Bedminster, NJ

(22, 15) (-7)46.727

(21.0)(13.082)

(269.6)49255.272

(65)12.670

(121)(28.0)

(23.7)

(106.3)(17.08)

(---)

NTL Europe

New York, NY

(403, 434) (+31)3.970

7.3(12.748)

(---)49116.977

(178)0.001

(475)(321.1)

(75.1)

(---)(47.03)

(---)

Lucent Technologies,

Murray Hill, NJ

(141, 76) (-65)13.568

(46.0)(11.753)

(---)49011.791

(176)5.906

(231)(86.6)

(66.1)

(---)(3.49)

(---)

CIT Group, Livingston, NJ

(317, xxx) (?)5.275

(---)(6.699)

(---)48942.711

(84)3.935

(277)(127.0)

(15.7)

(140.8)(31.66)

(---)

Conseco

Camel, Ind

(284, 239) (-45)6.148

(24.2)(6.204)

(---)4886.905

(311)0.014

(470)(100.9)

(89.9)

(116.1)(17.96)

(---)

TXU

Dallas, TX

(134, 58) (-76)14.086

(49.6)(4.210)

(721.9)48730.891

(115)5.223

(249)(29.9)

(13.6)

(83.1)(15.23)

(704.4)

Centerpoint Energy

Houston, TX

(236, 26) (-210)7.923

(82.9)(3.920)

(499.8)48619.634

(162)1.893

(352)(49.5)

(20.0)

(275.7)(13.08)

(490.4)

Kmart,

Troy, MI

(39, 40) (+1)32.765

(9.4)(3.691)

(---)48513.292

(218)0.059

(466)(11.3)

(27.6)

(328.4)(7.36)

(---)

AMR

Fort Worth, TX

(104, 108) (+4)17.299

(8.8)(3.511)

(---)48430.210

(117)0.231

(456)(20.3)

(11.6)

(417.5)22.57)

(---)

AES

Arlington, VA

(181, 201) (+20)10.332

7.5(3.509)

(1385.3)48333.776

(106)1.697

(367)(34.4)

(10.4)

(---)(6.51)

(1376.5)

UAL

Elk Grove Twp, IL

(132, 125) (+7)14.286

(11.5)(3.212)

(---)48224.190

(147)0.056

(467)(22.5)

(13.3)

(246.5)(53.55)

(---)

Solectron

Milpitas, CA

(158, 110) (-48)12.276

(34.3)(3.110)

((---)48111.014

(244)2.537

(333)(25.3)

(28.2)

(65.2)(3.98)

(---)

Table 1.2.2: The Fifteen Worst Organizational Distresses U. S. Companies of 2002-2003 Based on Fortune 500 Rank Losses[Source: Compiled from Fortune, April 14, 2003, pp. F1 F20]

Company,

Headquarters

(Rank 2002, Rank 2001)

(Rank Loss)2002 Sales

($ billion)

(% from 2001)2002 Profits

($ billion)

(% from 2001)Rank in Profits Loss

2002 Assets

($ billion)

(Rank)Market Value

($ billions)

(3/14/03)ROS

ROA

ROEEPS 2002

(% change from 2001)

Aquila,

Kansas City, MO

(477, 33) (-444)3.179

(92.1)(1.103)

(494.9)46410.678

(252)0.282

(453)(34.7)

(10.3)

(49.0)(7.22)

(398.3)

Allegheny Energy

Hagerstown, MD

(496, 185) (-311)2.965

(71.4)(0.270)

(164.6)41010.874

(246)0.643

(432)(9.1)

(2.5)

(11.9)(2.18)

(162.8)

Dynegy,

Houston, TX

(336, 30) (-306)4.950

(88.3)(2.802)

(748.6)47925.147

(138)0.784

(418)(56.6)

(11.1)

(133.6)(8.56)

(813.3)

Centerpoint Energy

Houston, TX

(236, 26) (-210) 7.923

(82.9)(3.920)

(499.8)486

19.643

(162)1.893

(352)49.5)

(20.0)

(275.7)(13.08)

(490.4)

Mirant

Atlanta, GA

(259, 52) (-207)7.125

(77.4)(0.197)

(134.7)40421.375

(156)0.590

(435)(2.8)

(0.9)

(3.8)(0.48)

(129.4)

Anadarko Petroleum, The Woodlands, TX

(414, 232) (-182)3.860

(53.9)0.831

(---)10218.248

(173)10.793

(138)21.5

4.6

11.93.21

(---)

Corning

Corning, NY

(455, 289) (-166)3.432

(45.3)(1.302)

(---)46811.548

(238)7.060

(203)(37.9)

(11.3)

(27.8)(1.39)

(---)

El Paso,

Houston, TX

(152, 17) (-135)12.616

(78.0)0.644

592.512849.106

(74)3.115

(308)5.1

1.3

6.31.23

583.3

Sierra Pacific Resources,

Reno, Nevada

(494, 359) (-135)2.992

(35.1)(307.5)

(642.0)4187.569

(297)0.300

(452)(10.3)

(4.1)

(21.8)(3.01)

(563.1)

Servicemaster

Downers Grove, IL

(437, 308) (-129) 3.628

(37.6)0.157

1.22853.419

(406)2.784

(321)4.3

4.6

12.80.51

(0.00)

CMS Energy

Dearborn, MI

(272, 156) (-116)6.676

(48.6)0.199

(---)26115.222

(196)0.507

(441)3.0

1.3

9.81.39

(---)

Computer Associates Intl

Islandia, NY

(497, 387) (-110)2.964

(29.4)(1.102)

(---)46212.226

(231)8.184

(186)(37.2)

(9.0)

(23.9)(1.91)

(---)

American Electric Power,

Columbus, OH

(120, 13) (-107)15.583

(74.6)(0.519)

(153.5)43634.741

(101)8.496

(181)(231.9)

(115.0)

(---)(21.35)

(---)

Occidental Petroleum

Los Angeles, CA

(252, 146) (-106)7.429

(47.4)0.989

(14.3)8716.548

(181)11.364

(135)13.3

6.0

15.72.61

(15.5)

Duke Energy

Charlotte, NC

(118, 14), (-104)15.663

(73.7)1.034

(45.5)8160.966

(61)12.597

(123)6.6

1.7

6.81.22

(50.0)

Table 1.2.3: The Fifteen Worst Organizational Distresses among U. S. Companies of 2002-2003 based on Percentage Sales Loss

[Source: Compiled from Fortune, April 14, 2003, pp. F1 F20]

Company,

Headquarters

(Rank 2003, Rank 2002)

(Rank Loss)2003 Sales

($ billion)

(% from 2002)2003 Profits

($ billion)

(% from 2002)Rank in Profits Loss

2003 Assets

($ billion)

(Rank)Market Value

($ billions)

(3/01/04)

(Rank)ROS

ROA

ROEEPS 2003

(% change from 2002)

Aquila,

Kansas City, MO

(477, 33) (-444)3.179

(92.1)(1.103)

(494.9)46410.678

(252)0.282

(453)(34.7)

(10.3)

(49.0)(7.22)

(398.3)

Dynegy,

Houston, TX

(336, 30) (-306)4.950

(88.3)(2.802)

(748.6)47925.147

(138)0.784

(418)(56.6)

(11.1)

(133.6)(8.56)

(813.3)

Centerpoint Energy

Houston, TX

(236, 26) (-210) 7.923

(82.9)(3.920)

(499.8)486

19.643

(162)1.893

(352)49.5)

(20.0)

(275.7)(13.08)

(490.4)

El Paso,

Houston, TX

(152, 17) (-135)12.616

(78.0)0.644

592.512849.106

(74)3.115

(308)5.1

1.3

6.31.23

583.3

Mirant

Atlanta, GA

(259, 52) (-207)7.125

(77.4)(0.197)

(134.7)40421.375

(156)0.590

(435)(2.8)

(0.9)

(3.8)(0.48)

(129.4)

American Electric Power,

Columbus, OH

(120, 13) (-107)15.583

(74.6)(0.519)

(153.5)43634.741

(101)8.496

(181)(231.9)

(115.0)

(---)(21.35)

(---)

Duke Energy

Charlotte, NC

(118, 14), (-104)15.663

(73.7)1.034

(45.5)8160.966

(61)12.597

(123)6.6

1.7

6.81.22

(50.0)

Allegheny Energy

Hagerstown, MD

(496, 185) (-311)2.965

(71.4)(0.270)

(164.6)41010.874

(246)0.643

(432)(9.1)

(2.5)

(11.9)(2.18)

(162.8)

Anadarko Petroleum, The Woodlands, TX

(414, 232) (-182)3.860

(53.9)0.831

(---)10218.248

(173)10.793

(138)21.5

4.6

11.93.21

(---)

TXU

Dallas, TX

(134, 58) (-76)14.086

(49.6)(4.210)

(721.9)48730.891

(115)5.223

(249)(29.9)

(13.6)

(83.1)(15.23)

(704.4)

CMS Energy

Dearborn, MI

(272, 156) (-116)6.676

(48.6)0.199

(---)26115.222

(196)0.507

(441)3.0

1.3

9.81.39

(---)

Occidental Petroleum

Los Angeles, CA

(252, 146) (-106)7.429

(47.4)0.989

(14.3)8716.548

(181)11.364

(135)13.3

6.0

15.72.61

(15.5)

Lucent Technologies,

Murray Hill, NJ

(141, 76) (-65)13.568

(46.0)(11.753)

(---)49011.791

(176)5.906

(231)(86.6)

(66.1)

(---)(3.49)

(---)

Corning

Corning, NY

(455, 289) (-166)3.432

(45.3)(1.302)

(---)46811.548

(238)7.060

(203)(37.9)

(11.3)

(27.8)(1.39)

(---)

PG&E

San Francisco

(140, 87) (-53)13.784

(40.0)(0.874)

(179.5)45333.696

(107)5.299

(246)(6.3)

(2.6)

(24.2)(2.36)

(178.1)

Table 1.2.4: The Fifteen Worst Organizational Distresses among U. S. Companies of 2003-2004 Based on Loss of Profits

[Source: Compiled from Fortune, April 5, 2004, pp. F1 F20]

Company,

Headquarters

(Rank 2003, Rank 2002)

(Rank loss/gain) 2003 Sales

($ billion)

(% from 2002)2003 Profits

($ billion)

(% from 2002)Rank in Profits Loss

2003 Assets

($ billion)

(Rank)Market Value

($ billions)

(3/01/04)

(Rank)ROS

ROA

ROEEPS 2003

(% change from 2002)

Mirant,

Atlanta, GA

(315, 259) (-55)5.863

(10.3)(4.474)

(---)50014.158

(213)0.191

(470)(76.3)

(31.6)

(584.8)(11.00)

(---)

El Paso,

Houston, TX

(154, 152) (-2)12.653

1.2(3.464)

(---)49942.676

(85)4.592

(325)(27.4)

(8.1)

(51.3)(6.01)

(---)

Solectron,

Milpitas, CA

(167, 158) (-9)11.404

(4.7)(3.462)

(---)4986.530

(328)5.278

(307)(29.6)

(53.0)

(243.5)(4.18)

(---)

RJ Reynolds Tobacco,

Winston-Salem, NC (341, 281) (-60)5.267

(15.2)(3.446)

(---)4979.677

(271)5.298

(306)(65.4)

(35.6)

(112.7)(41.17)

(---)

Sun Microsystems

Santa Clara, CA

(173, 155) (-41)11.434

(8.5)(3.429)

(---)49612.985

(230)17.618

(130)(30.0)

(26.4)

(52.8)(1.07)

(---)

UAL

Elk Grove Twp, IL

(145, 132) (-13)13.724

(3.9)(2.808)

(---)49521.979

(153)0.389

(465)(20.5)

(12.8)

(---)(27.36)

(---)

Agilent Technologies,

Palo Alto, CA

(305, 292) (-13)6.056

0.8(2.058)

(---}4946.297

(333)16.478

(141)(34.0)

(32.7)

(72.9)(4.35)

(---)

Kmart Holding

Troy, MI

(67, 39) (-28)26.032

(15.4)(1.991)

(---)4936.117

(338)2.694

(388)(7.6)

(32.5)

(116.6)(4.12)

(---)

EDS

Plano, TX

(87, 80) (-7)21.596

(0.9)(1.698)

(252.2)49218.280

(175)9.127

(220)(7.9)

(9.3)

(29.7)(3.55)

(255.7)

Goodyear Tire & Rubber, Akron, OH

(139, 137) (+2)14.741

6.4(1.438)

(---)49113.477

(221)5.633

(300)(9.8)

(9.8)

(334.9)(8.52)

(---)

Reliant Resources

Houston, TX

(166, 164) (-2)11.707

1.4(1.342)

(---)49013.308

(224)2.324

(404)(11.5)

(10.1)

(30.7)(4.57)

(---)

Duke Energy

Charlotte, NC

(75, 118) (+43)23.483

49.9(1.323)

(227.9)48955.946

(66)20.093

(110)(5.6)

(2.4)

(9.7)(1.48)

(221.3)

AMR,

Fort Worth, TX

(110, 104) (-6)17.444

0.8(1.228)

(---)48829.330

(120)2.518

(392)(7.0)

(4.2)

(2,669.6)(7.76)

(---)

Laidlaw International,

Naperville, IL

(391, xxx) (?)4.483

(---)(1.223)

(---)4873.853

(397)1.517

(432)(27.3)

(31.7)

(94.8)(3.82)

(---)

Visteon

Dearborn, MI

(109, 97) (-12)17.660

(4.6)(1.213)

(---)48610.964

(251)1.344

(439)(6.9)

(11.1)

(65.3)(9.65)

(---)

Table 1.2.5: The Fifteen Worst Organizational Distresses among U. S. Companies of 2003-2004 Based on Fortune 500 Rank Losses[Source: Compiled from Fortune, April 5, 2004, pp. F1 F20]

Company,

Headquarters

(Rank 2003, Rank 2002)

(Rank Loss)2003 Sales

($ billion)

(% from 2002)2003 Profits

($ billion)

(% from 2002)Rank in Profits Loss

2003 Assets

($ billion)

(Rank)Market Value

($ billions)

(3/01/04)

(Rank)ROS

ROA

ROEEPS 2003

(% change from 2002)

Cinergy

Cincinnati, OH

(393, 160) (-233)4.416

(63.2)0.470

30.322214.119

(215)7.100

(262)10.6

3.3

12.72.63

23.5

Lucent Technologies

Murray Hill, NJ

(243, 141) (-102)8.470

(37.6)(0.770)

(---)48015.765

(190)17.849

(126)(9.1)

(4.9)

(---)(0.29)

(---)

Gateway

Poway, CA

(484, 387) (-97)3.402

(18.4)(0.515)

(---)4752.028

(463)1.885

(417)(15.1)

(25.4)

(66.7)(1.62)

(---)

Conseco

Carmel, Indiana

(370, 284) (-86)4.710

(30.7)2.298

(---)5429.922

(117)2.242

(408)48.8

7.7

81.6(---)

(---)

OM Group

Cleveland, OH

(405, 331) (-74)4.298

(14.7)(0.248)

(---)4621.298

(491)0.911

(451)(5.8)

(19.1)

(48.3)(8.86)

(---)

Xcel Energy

Minneapolis, MN

(254, 180) (-74)7.939

(22.6)0.623

(---)18318.264

(176)7.159

(261)7.8

3.4

11.71.5

(---)

Avaya

Basking Ridge, NJ

(401, 335) (-66)4.338

(12.5)(0.088)

(---)4484.057

(393)7.716

(253)(2.0)

(2.2)

(44.0)(0.23)

(---)

Merck

Whitehouse Stn, NJ

(83, 17) (-66)22.856

(56.6)6.831

(4.5)1540.588

(90)107.801

(17)30.4

16.8

43.93.03

(3.05)

Applied Chemicals

Santa Clara, CA

(392, 327) (-65)4.477

(11.3)(0.150)

(155.4)45510.312

(259)36.589

(65)(3.3)

(1.4)

(1.8)(0.09)

(156.3)

American Financial Group,

Cincinnati, OH

(486, 424) (-62)3.366

(10.2)0.294

247.127720.200

(167)2.105

(412)8.7

1.5

14.24.12

237.7

RJ Reynolds Tobacco,

Winston-Salem, NC

(341, 281) (-60)5.267

(15.2)(3.446)

(---)4979.677

(271)5.298

(306)(65.4)

(35.6)

(112.7)(41.17)

(---)

Schering-Plough

Kenilworth, NJ

(247, 187) (-60)8.334

(18.1)(0.092)

(104.7)45015.102

(198)26.629

(83)(1.1)

(0.6)

(1.3)(0.06)

(104.5)

Comerica

Detroit, MI

(489, 433) (-56)3.299

(10.8)0.661

10.016752.592

(68)10.059

(209)20.0

1.3

12.93.75

10.3

Mirant,

Atlanta, GA

(314, 259) (-55)5.863

(10.3)(4.474)

(---)50014.158

(213)190.6

(470)(76.3)

(31.6)

(584.8)(11.00)

(---)

CIT Group

Livingston, NJ

(371, 317) (-54)4.677

(11.3)0.567

(---)19246.343

(79)8.376

(233)12.1

1.2

10.52.66

(---)

Table 1.2.6: The Fifteen Worst Organizational Distresses among U. S. Companies of 2003-2004 based on Percentage Sales Loss

[Source: Compiled from Fortune, April 5, 2004, pp. F1 F20]

Company,

Headquarters

(Rank 2003, Rank 2002)

(Rank Loss)2003 Sales

($ billion)

(% from 2002)2003 Profits

($ billion)

(% from 2002)Rank in Profits Loss

2003 Assets

($ billion)

(Rank)Market Value

($ billions)

(3/01/04)

(Rank)ROS

ROA

ROEEPS 2003

(% change from 2002)

Cinergy

Cincinnati, OH

(393, 160) (-233)4.416

(63.2)0.470

30.322214.119

(215)7.100

(262)10.6

3.3

12.72.63

23.5

Merck

Whitehouse Stn, NJ

(83, 17) (-66)22.856

(56.6)6.831

(4.5)1540.588

(90)107.801

(17)30.4

16.8

43.93.03

(3.05)

CMS Energy

Jackson, MI

(307, 272) (-35)6.017

(38.9)(0.044)

(---)44213.838

(218)1.505

(433)(0.7)

(0.3)

(2.4)(0.30)

(---)

Lucent Technologies

Murray Hill, NJ

(243, 141) (-102)8.470

(37.6)(0.770)

(---)48015.765

(190)17.849

(126)(9.1)

(4.9)

(---)(0.29)

(---)

Conseco

Carmel, Indiana

(370, 284) (-86)4.710

(30.7)2.298

(---)5429.922

(117)2.242

(408)48.8

7.7

81.6(---)

(---)

AT&T

Bedminster, NJ

(40, 22) (-18)34.529

(26.1)1.865

(---)6147.988

(75)16.090

(149)5.4

3.9

13.42.36

(---)

Xcel Energy

Minneapolis, MN

(254, 180) (-74)7.939

(22.6)0.623

(---)18318.264

(176)7.159

(261)7.8

3.4

11.71.5

(---)

Circuit City Stores

Richmond, VA

(195, 151) (-44)9.954

(22.2)0.106

(51.5)3713.799

(400)2.478

(395)1.1

2.8

4.5(---)

(---)

Conagra Foods

Omaha, NE

(84, 50) (-34)22.053

(20.2)0.774

(1.0)14515.071

(201)14.658

(155)3.5

5.1

16.81.46

(0.7)

TXU

Dallas

(177, 134) (-43)11.325

(19.6)0.582

(---)18931.686

(112)9.163

(219)5.1

1.8

9.81.62

(---)

PG&E Corp

San Francisco, CA

(179, 140) (-39)11.221

(18.6)0.420

(---)23730.175(116)11.991

(181)3.7

1.4

10.01.06

(---)

Gateway

Poway, CA

(484, 387) (-97)3.402

(18.4)(0.515)

(---)4752.028

(463)1.885

(417)(15.1)

(25.4)

(66.7)(1.62)

(---)

Schering-Plough

Kenilworth, NJ

(247, 187), (-60)8.334

(18.1)(0.092)

(104.7)45015.102

(198)26.629

(83)(1.1)

(0.6)

(1.3)(0.06)

(104.5)

Kmart Holding

Troy, MI

(39, 67) (+28)26.032

(15.4)(1.991)

(---)4936.117

(338)2.694

(388)(7.6)

(32.5)

(116.6)(4.12)

(---)

RJ Reynolds Tobacco,

Winston-Salem, NC (281, 341) (+60)5.267

(15.2)(3.446)

(---)4979.677

(271)5.298

(306)(65.4)

(35.6)

(112.7)(41.17)

(---)

Table 1.2.7: Comparison of Various Definitions of Corporation Distress: Operational Outcomes

Dimension of ComparisonFortune 500- 2002-2003 Data:

Definition of DistressFortune 500- 2003-2004 Data:

Definition of Distress

Highest Absolute Loss in Profits

($ billions)

Highest Fortune 500 Absolute Rank Loss

Highest Percentage Sales Loss

Highest Absolute Loss in Profits

($ billions)

Highest Fortune 500 Absolute Rank LossHighest Percentage Sales Loss

Tables1.2.11.2.21.2.31.2.41.2.51.2.6

Company Overlap12

128

33

Fortune 500 Rank: Mean (Median) (SD) (Range)168.00

(141.00)

(108.61)

(381.00)334.33

(336.00)

(141.90)

(379.00)266.80

(252.00)

(137.91)

(378.00)182.73

(154.00)

(103.67)

(324.00)351.53

(371.00)

(110.12)

(406.00)

230.93

(243.00)

(131.53)

(444.00)

Fortune 500 Rank previous year: Mean (Median) (SD) (Range)129.57

(105.00)

(115.25)

(419.00)149.80

(146.00)

(136.32)

(374.00)94.27

(58.00)

(87.28)

(276.00)155.00

(145.50)

(74.81)

(253.00)270.87

(284.00)

(115.12)

(416.00)

163.00

(151.00)

(107.85)

(370.00)

Rank Loss:

Mean (Median) (SD) (Range)-27.79

(-7.00)

(62.07)

(241.00)-184.533

(-135.00)

(98.74)

(340.00)-172.53

(-135.00)

(109.09)

(391.00)-12.86

(-10.50)

(24.69)

(103.00)-80.67

(-66.00)

(44.64)

(179.00)

-67.93

(-60.00)

(52.16)

(215)

Sales in Billion among top 15 companies: Mean (Median) (SD) (Range) 16.69

(13.57)

(13.15)

(42.76)6.73

(4.95)

(4.49)

(12.70)8.86

(7.43)

(4.83)

(12.70)13.57

(12.65)

(6.72)

(21.55)6.38

(4.68)

(4.87)

(19.56)

12.44

(8.47)

(9.38)

(31.13)

Change from Previous Year: Mean (Median) (SD) (Range)-21.29

(-16.25)

(25.26)

(90.4)-62.38

(-71.40)

(20.75)

(62.70)-64.61

(-71.40)

(17.81)

(62.70)

-0.21

(-2.40)

(15.79)

(65.30)-22.90

(-15.20)

(17.01)

(53.00)-28.23

(-22.20)

(14.82)

(48.00)

Assets in Billion among top 15 companies: Mean (Median) (SD) (Range) 31.40

(27.67)

(26.60)

(108.55)21.15

(16.55)

(15.86)

(57.55)24.70

(19.63)

(14.86)

(50.29)17.71

(13.31)

(14.65)

(52.09)19.63

(15.10)

(15.85)

(51.29)

19.61

(15.10)

(13.55)

(45.96)

Fortune 500 Rank in Billion Assets:

Mean (Median) (SD) (Range)488.00

(488.00)

(4.47)

(14)194.13

(181.00)

(89.40)

(345.00)158.40

(162.00)

(59.81)

(191.00)227.00

(224.00)

96.78)

(331.00)226.00

(198.00)

(131.66)

(423)

212.00

(198.00)

(113.94)

(388.00)

Table 1.2.8: Comparison of Various Definitions of Corporation Distress: Profitability Ratios

Dimension of ComparisonFortune 500- 2002-2003 Data:

Definition of DistressFortune 500- 2003-2004 Data:

Definition of Distress

Highest Absolute Loss in Profits

($ billions)Highest Fortune 500 Absolute Rank LossHighest Percentage Sales Loss

Highest Absolute Loss in Profits

($ billions)

Highest Fortune 500 Absolute Rank LossHighest Percentage Sales Loss

Tables1.2.11.2.21.2.31.2.41.2.51.2.6

Profits among top 15 companies: Mean (Median) (SD) (Range) -15.09

(-6.20)

(24.67)

(95.59)-20.990

(-0.27)

(79.27)

(308.53)-1.55

(-0.52)

(3.28)

(12.79)-2.31

(-1.99)

(1.10)

(3.261)

0.13

(-0.09)

(2.47)

(11.31)0.47

(0.42)

(2.24)

(10.28)

Change from Previous Year: Mean (Median) (SD) (Range)-719.15

(-610.85)

(480.96)

(1115.70)-209.47

(-153.5)

(375.07)

(1341.10)-233.16

(-164.60)

(378.50)

(1341.50)-240.05

(-240.05)

(17.18)

(34.30)

3.80

(2.75)

(139.37)

(402.50)-26.28

(-4.50)

(52.68)

(135.00)

Market Value among top 15 companies: Mean (Median) (SD) (Range) 7.47

(2.54)

(13.08)

(49.75)4.63

(2.78)

(4.59)

(12.32)4.97

(5.22)

(4.32)

(12.32)6.34

(4.59)

(6.54)

(19.902)16.13

(7.16)

(27.33)

(107.61)15.64

(7.16)

(26.51)

(106.30)

Fortune 500 Rank in Market Value:

Mean (Median) (SD) (Range)306.20

(333.00)

(149.99)

(440.00)305.20

(321.00)

(130.97)

(330.00)289.67

(249.00)

(123.25)

(330.00)321.93

(325.00)

(122.49)

(360.00)264.87

(261.00)

(146.81)

(453.00)253.33

(261.00)

134.20)

(416.00)

ROS: Mean (Median) (SD) (Range)-101.03

(-49.50)

(98.81)

(309.80)-27.75

(-9.10)

(61.43)

(253.40)-33.05

(-9.10)

(62.64)

(253.40)-24.46

(-20.50)

(21.47)

(70.70)-2.65

(-1.10)

(32.13)

(125.10)1.16

(3.50)

(24.18)

(114.20)

ROA: Mean (Median) (SD) (Range)-43.58

(-27.60)

(34.72)

(104.60)-10.98

(-2.50)

(29.72)

(121.00)-15.90

(-2.60)

(32.53)

(121.00)-20.75

(-12.80)

(14.89)

(50.60)-5.70

(-0.60)

(15.09)

(52.40)-3.54

(1.80)

(15.17)

(52.40)

ROE: Mean (Median) (SD) (Range)-189.04

(-140.80)

(113.70)

(352.30)-34.59

(-7.85)

(79.53)

(291.40)-42.97

(-11.90)

(82.28)

(291.40)-319.236

(-83.85)

(694.24)

(2659.60)-48.01

(4.60)

(161.84)

(666.40)-6.80

(9.90)

(55.24)

(198.20)

EPS: Mean (Median) (SD) (Range)-20.57

(-17.96)

(14.60)

(50.06)-3.27

(-1.39)

(6.73)

(24.56)-4.38

(-2.18)

(7.29)

(24.56)-9.24

(-4.57)

(10.86)

(40.10)-3.26

(-0.08)

(11.78)

(45.29)-2.60

(1.06)

(11.75)

(44.20)

Table 1.2.9: Fortune 500 Rank Order Correlations for Worst Organizational Distresses by Defining Variables

Fortune 500 Data of worst Distresses based on:VariablesSales Rank in 2001-2002Profits Rank in 2002-2003Assets Rank in 2002-2003

Market Value Rank in

2002-2003

Highest Absolute

Profit Loss for 2002-2003Sales Rank in 2002-20030.845**-0.0030.3440.363

Sales Rank in 2001-20020.0780.3170.345

Profits Rank in 2002-2003-0.424-0.698**

Assets rank in 2002-20030.630**

Highest

Sales Rank Loss for 2002-2003Sales Rank in 2002-20030.749**0.4220.800**0.302

Sales Rank in 2001-20020.1070.730**-.100

Profits Rank in 2002-20030.3100.508

Assets rank in 2002-20030.326

Highest

Percentage Sales Loss for 2002-2003Sales Rank in 2002-20030.612*0.1100.848**0.396

Sales Rank in 2001-2002-0.1390.616*-0.189

Profits Rank in 2002-20030.2980.446

Assets rank in 2002-20030.407

Highest Absolute

Profit Loss for 2003-2004Sales Rank in 2002-20030.970**0.2490.531*0.142

Sales Rank in 2001-20020.527*0.260-0.136

Profits Rank in 2002-2003-0.039-0.083

Assets rank in 2002-20030.154

Highest

Sales Rank Loss for 2003-2004Sales Rank in 2002-20030.922**0.2150.3370.567*

Sales Rank in 2001-20020.2520.2880.531*

Profits Rank in 2002-20030.691**0.181

Assets rank in 2002-20030.404

Highest

Percentage Sales Loss for 2003-2004Sales Rank in 2002-20030.924**0.3580.4060.516*

Sales Rank in 2001-20020.4420.4500.615*

Profits Rank in 2002-20030.711**0.384

Assets rank in 2002-20030.635*

Table 1.2.10: Fortune 500 Correlations for Worst Corporate DistressesWorst performance based on:VariablesProfitsAssetsMarket ValueROSROAROEEPS

Highest Absolute

Profit Loss for 2002-2003Sales-0.5120.640*0.551*0.1450.005-0.1030.200

Profits-0.855**-0.909**0.571*0.566*-0.0710.064

Assets0.874**-0.298-0.1320.066-0.104

Market Value-0.431-0.3660.2110.006

ROS0.765**-0.2880.434

ROA-0.2980.069

ROE0.134

Highest

Sales Rank Loss for 2002-2003Sales0.2350.888**0.405-0.396-0.4770.029-0.292

Profits0.2410.268-0.072-0.0600.0300.000

Assets0.406-0.134-0.1860.053-0.061

Market Value-0.071-0.1390.3150.160

ROS0.983**0.750**0.911**

ROA0.839**0.871**

ROE0.919**

Highest

Percentage Sales Loss for 2002-2003Sales-0.2340.724**0.394-0.353-0.4490.046-0.311

Profits0.3020.1570.3430.4530.839**0.328

Assets0.376-0.0020.0030.136-0.034

Market Value-0.039-0.1290.3560.163

ROS0.966**0.791**0.803**

ROA0.857**0.706**

ROE0.816**

Highest Absolute

Profit Loss for 2003-2004Sales0.4530.4190.1420.756**0.494-0.0830.334

Profits0.0790.0540.800**0.524*-0.1470.339

Assets0.3360.2700.675**-0.1660.124

Market Value0.1170.0590.2730.340

ROS0.582*-0.0960.490

ROA-0.2400.127

ROE0.028

Highest

Sales Rank Loss for 2003-2004Sales0.660**0.3010.916**0.2100.4070.1130.128

Profits0.506*0.724**0.844**0.831**0.688**0.579*

Assets0.3360.505*0.561*0.2800.354

Market Value0.3050.4940.2480.224

ROS0.893**0.827**0.786**

ROA0.694**0.774**

ROE0.387

Highest

Percentage Sales Loss for 2003-2004Sales0.3390.507*0.3660.1590.133-0.0040.253

Profits0.697**0.780**0.782**0.795**0.761**0.581*

Assets0.4980.513*0.608*0.601*0.339

Market Value0.3220.4360.3130.203

ROS0.792**0.850**0.917**

ROA0.955**0.697**

ROE0.699*

PAGE 109