Thomson Reuters in Trouble?

The online financial newsletter StreetAuthority has published a list of 12 companies that are at risk because of a looming debt problem.

Among them is Thomson Reuters who, among other things, run the Web of Science database and provide the data for the Times Higher Education World University Rankings. Their data is also used by Shanghai Jiao Tong University's rankings to construct their Highly Cited Researchers and Publications indicators.

Thomson Reuters will not of course go bankrupt tomorrow. But if they are in trouble, then there could be implications for international university rankings.

During the past generation, a reasonable level of debt has always been seen as appropriate, because balance sheets were able to withstand a typical recession. Yet all that changed in 2008. GM's (NYSE: GM) debt load crashed the company, forcing it into bankruptcy, while many other companies such as GE (NYSE: GE), Ford Motor (NYSE: F), Hertz (NYSE: HTZ) and Domino's Pizza (NYSE: DPZ) saw their stocks plunge on fears a bankruptcy filing would be necessary if economic conditions worsened.

Thankfully, many companies wised up and have been taking steps to strengthen their balance sheets. But not everyone got the message. Some companies still carry too much debt and might run into trouble if the U.S. economy slips back into recession. These companies will need to make large payments to handle their debt, and right now they are at risk of not having enough cash to meet potential obligations. Typically, a company can simply roll over that debt and push out the time frame when debts come due. But a weak economy would make this task much harder as lenders grow skittish.

That's why it's so important to pay attention to balance sheets. Lots of debt is only a problem if the debts are soon coming due. For example, mattress maker Sealy Corp. (NYSE: ZZ) has a very weak balance sheet, with almost $800 million in debt and less than $100 million in cash. But management wisely rolled over its debt while it could, and now the company faces no major repayments until 2014.

But if a company's "current portion of long-term debt" -- that is, debts due within the next 12 months -- exceeds cash on hand, you need to listen to how management plans to address the problem because these companies could be at risk of failing. I went in search of companies that may have just such a problem (less cash than near-term loan obligations). I also added Canadian media firm Thomson Reuters (NYSE: TRI) to the mix because its weak balance sheet is just above that threshold. The table below highlights a group of companies that are at risk of having to declare bankruptcy in 2012 if their lenders are in no mood to extend them more loans.

LSE overtakes Oxford in British Ranking

The Complete University Guide has just published its rankings of British universities. According to Brendan O'Malley in University World News.

It is the first time since 2000 that Oxford and Cambridge have not shared the top two spots – in that year Imperial College London knocked Oxford into third place.


In separate listings for the leading universities and higher education institutions covering 62 subjects, Cambridge is in the top 10 for all 46 subjects it offers, and top in 30. Oxford is in the top 10 for all 32 of its subjects, and is placed first in 12. The LSE is in the top 10 for all 12 subjects offered, and top for three.


There are two new entrants to the Top 20 – the University of Glasgow (17th) and Leicester (19th). They have replaced Sussex, which just missed out in 21st place, and the School of Oriental and Asian Studies, which fell from 15th to 30th position.

O'Malley continues:

The interactive guide ranks universities on nine factors: student satisfaction; research assessment; entry standards; student-to-staff ratio; spending on academic services; spending on student facilities; good honours degrees achieved; graduate prospects; and completion.

The subject tables are based on four factors: student satisfaction; research assessment; entry standards; and graduate prospects.

When LSE offers 12 subjects and still beats Oxford with 32 subjects, these results need to be approached with caution. Bernard Kingston is honest enough to issue a health warning.

The good degrees and completion rates indicator are obvious incentives to game the system.

London Met Update

It seems that the proposal to ban alchohol from one campus was not quite what was reported. Apparently the vice-chancellor was looking for an excuse to save money. The latest report is that Muslim students are disassociating themselves from his plan.

Another Quality Initiative

Every so often education bureaucrats come up with bright ideas to boost quality and raise standards and proclaim their faith that students and teachers at all levels can perform as well as anybody anywhere.

A recent example is the decree by the the Director General of Higher Education at the Indonesian Education and Culture Ministry, that in order to graduate undergraduate students must publish a paper in a scientific journal, master's students in a national scientific journal and doctoral students in an international scientific journal.

It is easy to predict what will happen if this idea survives. Every university will set up a website and call it an  online journal to which  an essay, term paper or thought paper by every undergraduate or group of undergraduates will be uploaded, after running it through turnitin.

It would be almost as easy to set up national websites and call them national online scientific journals and publish term papers by masters students.

But getting papers into international journals will be another matter if the term international has any meaning and if the papers are to be single-author papers. We can expect a lot of creative workarounds here.