Companies' Risk of Bankruptcy - Audit Integrity

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Includes: AAL, ABG, ASCA, BYD, CAA, CEG, CTL, F, GM, JAH, LEN, MFW, MGM, OWW, RAD, REV, THC, XRIT, YRCW, ZQK
by: Research Recap

On the heels of Moody’s publishing a list of “bottom rung” companies most likely to default, Audit Integrity ups the ante with the preliminary findings of a new quantitative model designed to identify large companies most at risk of bankruptcy.

Chairman Jim Kaplan says their approach is to “combine both the power of static (accounting-based) and hazard (market-based) models. This approach allows for dynamic adjusting for potential bankruptcy between financial reporting periods.”

Our predictive bankruptcy measures will not be a substitute for Going Concern disclosures, but should be a leading indicator of these events.

“We are still finalizing and testing this new model, but I thought you would be interested in a preliminary list of companies at risk, ” he writes in his latest Chairman’s Corner. “The list below is representative of companies that fall within the lowest decile of all companies modeled by Audit Integrity for bankruptcy.”