For many companies, this is a time to pounce on acquisitions and grab market share, provided they have sufficient cash. Although sagging advertising revenues widened SourceForge’s year-over-year net loss in the first quarter, CFO Morris says she is nevertheless on the hunt for acquisitions, even those that are not necessarily accretive to earnings. “One of our key strategies is to invest in our sites,” she says. “If there were some talent available through an acquisition,” the company “would certainly consider it,” she says, given the $47.1 million of cash sitting on its balance sheet. SourceForge has already made one such acquisition, in June. The company “has been very clear with the Street” about its intentions, says Morris.
No one knows when the downturn will end, or how strong the recovery will be. But if CFOs come out of the experience a little more cautious and frugal, they will also be far more battle-tested and capable. “You’re dealing with a variety of situations that may not have existed before. And you’re dealing with things that a CFO is supposed to deal with, like capital structure and capital allocation,” says Prabhu. “If you like being a CFO, this is a good time to be one.”
Alix Stuart is a senior writer at CFO. Additional reporting was provided by Josh Hyatt and Kate O’Sullivan.
Finance Confronts the New Normal
What will the postrecession business world look like? We surveyed more than 400 finance executives about what they’re doing to prepare for the future — and how different they think that future will be. The topic elicited a wide range of responses, with executives disagreeing on the impact the recession has made on the CFO post, but nearly unanimous on the question of its legacy. The upshot: few expect a return to the prerecession status quo, but most hope the lessons they’ve learned will serve them well when the economy rebounds.