Pure Business

In a recent few years, Blockbuster only saw contradicting results to its company name in the financial statement. The failure led from increasing debt but declining assets with resulted in a much higher debt to assets ratio than previous years. The report of fourth quarter and fiscal-year 2009 financial results show: revenue dropping $0.23 billion in a year; gross profit decreasing 118.5 million in a year; operating loss increasing $50.9 million compared to the full year 2008; a net loss increasing by 184.1 million compared to the full year of 2008. This highlights some of the results of failure in finance of Blockbuster.  The charts below (Quarterly Data: left, Annual Data: right) based on the balance sheet of financial statement indicates that Blockbuster has been increasing in its debt but decreasing in its assets continuously since 2008 and throughout 2009. This resulted in an increase in debt to assets ratio which is significant sign of financial downfall to the company. We should keep an eye on Blockbusters’ 2010 financial statement to see how and in what areas they made a “blockbusting” recovery to its finance.