According to a recent Bloomberg article, corporations in the United States are healthier than they have been in decades.
Profits for the S&P 500 companies, as measured by EBITDA, increased to $1.84 billion for the 12-month period ending second quarter 2014, with a net debt to EBITDA ratio of 1.6, down from a high of 4.9 in 2003. Companies have been able to stockpile cash, with such holdings for S&P 500 companies increasing from $2.28 trillion to $3.59 trillion over the past four years. Privately held companies in certain sectors have also seen tremendous growth fueled by the resurgence of the automotive industry, which, as touted in a recent speech by President Obama, has added over 700,000 manufacturing jobs since 2010.
This growth is expanding the wealth of corporate owners and shareholders. However, memories are short, and many experts predict this period of growth is not sustainable and that we should be prepared for a second recession in the near future. Now is the time to structure one’s holdings to ensure their hard-won wealth is preserved no matter what comes next.
At McDonald Hopkins, our restructuring and estate planning experts have the experience, knowledge and skill to help you protect what is most important to you: your future.