Business Services Industry
Used-car credit firm's stock skids. (Credit Acceptance Corp.)
Crain's Detroit Business, October, 1997 by Roush, Matt
$60M write-off jars investors Used-car superdealer Donald Foss' Credit Acceptance Corp. has hit a big pothole, and investors got rattled. A new computer model of the Southfield auto-credit company's loans showed potential loan losses higher than previously predicted. Also, Credit Acceptance's auditors insisted that the company take a charge to conform to accounting rules on the present value of future cash flows.
As a result, the company said Wednesday that it took a $60 million charge to bolster loan-loss reserves, wiping out almost a year's worth of profits. Credit Acceptance (Nasdaq: CACC) posted a loss of $27.7 million, or 59 cents a share, on revenue of $40.9 million in the quarter ended Sept. 30, down from net income of $10.6 million on revenue of $32.5...
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