
Management risk 85
crisis was not easy. While the sale of CIT helped boost Tyco’s cash level to about $7
billion, nearly half of its short-term debt, which by then stood at $13 billion, was
coming due by the end of 2002.
䊏 As previous estimates of cash flow continued to be downsized, it looked like Tyco
could come up way too short of what it needed.
䊏 And there was still an awful lot of uncertainty, because lower margins and higher
tax rates cut its earnings.
Companies that have gone through similar pains know that fire sales are no good
way to raise cash, though they are evidence of bad management. Being squeezed for
cash to the point of oblivion, T ...