This last decade showed rising population, decreasing interest rates, growth in the hourly wage rate and household income, improving education attainment, and growing GDP. The figure shows that the growth rate in each of the three measures has declined over the past 50 years and was lowest during the decade 2010–2019, despite that period’s having been labeled as a decade of economic recovery. The results are shown in the following figure. We calculated median values because, unlike averages, medians are not affected by any company’s extreme performance. For 2000–2009, we removed the fiscal years 20 because of the great recession. We calculated the annual percent-growth rate in those three financial indicators for each midsize company and year. That surplus is used to finance further growth and pay dividends to shareholders. Profits is the bottom-line number in income statements and shows whether the company is generating a net surplus in its operations. Asset growth shows whether the company is increasing or decreasing its total resource deployment. Sales growth indicates whether the company’s business is growing or diminishing. Sales is the top-line number in income statements and indicates the market size for the company’s products and services. To show the slowing growth trend, we calculated year-on-year percent-growth rates of three financial indicators - sales, assets, and profits - for each midsize company. In every successive decade since 1970–79, the annual growth rates of assets, sales, and profits have been declining for midsize companies, which are increasingly struggling to earn profits. (The top 30% and the bottom 30% are classified as big and small, respectively.)ĭata suggests that a perfect storm has been brewing for midsize companies over the past 50 years. stock exchanges by market value and identified them on an annual basis based on their market value at the end of previous fiscal year. We defined midsize companies as those in the middle 40% of all companies listed on the U.S. We used a database approach to show the current plight of midsize companies and examined the recent period of 2000 to 2019, culminating in the pandemic year 2020. Recent trends don’t bode well for midsize companies that are the bedrock of any nation’s economy.
When the Covid-19 pandemic hit, a record number of companies, many of which had survived for more than 50 or even 100 years, had no other option but to file for bankruptcy.
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