The dual problems of unsatisfactory earnings and a precarious balance sheet can feed upon each other and signal the start of a downward financial spiral that becomes increasingly difficult to reverse. In the early 1970s, the BFGoodrich Co. (BFG), Akron, Ohio, faced such a situation and began a massive effort to correct it. During the period 1970-1972, Goodrich had entered its second century of operations and was a diversified manufacturer. Its worldwide sales had hovered around the $1 billion mark for several years and the company had just emerged from an unsuccessful and acrimonious takeover attempt by Northwest Industries. Leaders of BFG faced a deteriorating financial situation, including volatile and disappointing earnings, low return on assets, increasing debt, poor liquidity and vast capital requirements as a result of meager replacement, modernization, and expansion projects during 1960s. Beginning in 1972, a new chief executive and a strengthened financial staff undertook to reverse this financial decline and to make fundamental, lasting improvements in the company's financial management. Basic treasury functions were upgraded, with strong central direction from corporate headquarters. New systems and approaches were implemented for tile company's cash, credit, foreign currency and risk management functions.