In every industry there are opportunities from learning because companies go bankrupt for a variety of reasons. In the toy industry, Toys “R” Us declared bankruptcy – what lessons can be learnt? Sarah Halzack is a Bloomberg columnist for the consumer and retail industries has some ideas.

The first reason is debt – whether it be personal debt or corporate debt too much is a bad thing. There is a point where it becomes too much and for investors – if the company is spending a great deal of time and energy paying down debt, then it time to stay away. One big clue is accounts payable grow and accounts receivable decrease because suppliers want to be paid before they ship.

For some companies doing everything in-house means they have an expertise to do whatever is required. Toy”R” Us partnered with Amazon, but the partnership did not go well and Toy”R”Us never really caught up in the on line platform.

The retail environment is about keeping things fresh and new, 60 years the concept of Toys”R”Us was new and exciting. Now days, the changes made by executives do not seem to be new and exciting.

In hindsight one strategy for Babies”R”Us might have to gone upscale and high-touch service. It never went that way and it might have been a missed opportunity.

Linking to dividend paying stocks, one of the reasons for the success of the companies is profits are made to reinvest and pay its shareholders a dividend. All companies use debt, it is not necessarily bad, however when it crosses a line the writing is on the wall and you need to find alternatives.

There are more questions than answers, till the next time – to raising questions.