I HATE TO SAY I TOLD YOU SO!

This is a sad day for long-time antique Kodak camera collectors like me, not a day to remind readers about the critical importance of cash flow to business survival.

Unfortunately, as demonstrated by the following timeline, the inventor and one-time “King of Cameras” has been reduced to a shadow of its former greatness. It was victimized by slow strategic decision-making and the dreaded negative cash flow.

Here is a brief summary of their 128-year history.

  • 1884: George Eastman developed film technology to replace photographic plates. He founded Eastman Kodak in 1892. With the slogan “You press the button, we do the rest” he introduced photography to the masses with cardboard box cameras that sold for $1, the equivalent of $24 in 2009 dollars.
  • 2009: With its market steadily evaporating since the 1975 invention of digital cameras, Kodak ended a 74-year run when it discontinued production of Kodachrome film. Their SEC filings reported a $210 million loss that year. Ironically, a Kodak engineer invented the digital camera.
  • January 19, 2012: The market for film cameras now virtually extinct, Kodak has witnessed its market value plummet from over $30 billion to $150 million. Today, they filed for Chapter 11 bankruptcy protection, having endured an operating cash drain of $750 million over the past twelve months alone. A company spokesperson said they “intend to sell significant assets” during the bankruptcy.

The moral of the story is this: few things in life are absolute. The laws of gravity and physics come to mind. Another absolute is the need for positive cash flow.

Almost everything else is negotiable.

© 2011 by Dale R. Schmeltzle

CFO America: Your Cash Flow Optimization experts

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