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Thomas Cook it

Remember the old advert? “Dont book it, Thomas Cook it” Simply a case of dont book at all it would seem …sadly

The woes at thomas cook have been very much in the news this week and the share price has collapsed and the talk has now moved onto speculation about the very survival of the group. Bad news of course, but unexpected?

Well the results certainly took the city by surprise and I would imagine that many suppliers are a little nervous too. It would be interesting to know how the credit insurers have responded

But was any of this predictable? A quick look at the last set of accounts suggest so. I have credit checked large holiday firms before and the accounting is a certainly different and I wont go into drab detail. However it was clear that a drop in turnover was going to put some strain on the balance sheet,a s had been illustrated by the previous downward spiral. As in all credit assessment, you have to sometimes strip out the waffle and look at the fundamentals. And was a drop in turnover of some magnitude to be expected or not? Well it is not exactly the perfect market conditions for slightly upmarket package holidays and even if it was, the internet and general trend away from that product was bound to have some impact.

Predictable? Maybe not to the alarming extent reported but shouldn’t have been too surprising, but again this is a perfect example of how credit assessment merely starts with the balance sheet

Putting that aside though,they are (like HMV) a good company and high street presence and regardless of the cold facts, I wish them well
http://www.ft.com/cms/s/0/aa342ea0-1604-11e1-b4b1-00144feabdc0.html#axzz1edbZU63f

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