1. Fact
“There are greater risks associated
with private companies than public.”
FIVE MYTHS ABOUT
RISK IN PUBLIC COMPANIES
Fewer public companies fail overall…
but when they do, the impact is huge.
Public company bankruptcy risk is up 87% since the start of the Great Recession
in the United States.
Look beyond the total number of companies: pay attention to the dollars at risk.
U.S. public company failures total $358 billion in assets over the past 6 years. And,
risk is rising. More than half of all corporate debt is issued by non-investment
grade companies and defaults are escalating.
2016
LARGE COMPANY
CHAPTER 11 FILINGS DOUBLED
*AMONG COMPANIES WITH
$100+M LIABILITIES,
THROUGH MID-MARCH
2016*
20
2015
10
+48%
PROJECTED 2016
HIGH YIELD DEBT DEFAULTS
2016 HIGH YIELD DEBT DEFAULTS
(PROJECTED)
FITCH
6%S&P
3.9%
ALTMAN-
KUEHNE
5%
MOODY’S
4.4%
HISTORICAL AVERAGE: 3.4%
+49%
GLOBAL
PUBLIC
BANKRUPTCY RISK:
Learn the truth about public company risk,
and prevent financial storm clouds from
impacting your cash flow, supply chain,
revenue and reputation.
Do you know your true risks? Much of
what we think we know about public
companies doesn’t add up.
Business failure risk
is 87% higher today
than it was
at the start of
the Great Recession.
Myth #1
Fact
Financial stress and bankruptcy risk
are up... and rising fast.
Corporate structures are complex. Ownership changes often, businesses use
different names than their corporate parents and customer data quickly gets
dated.
In such a dynamic business environment, it’s hard to know where public
company risk is hiding. Get help to uncover significant risks in your portfolio.
Fact
Take a closer look.
Public company risk isn’t obvious.
“Public companies rarely go bankrupt,
so there is little need to monitor them.”
Myth #2
“Public companies aren’t my customers.”
Myth #3
53%
OUR CLIENTS’
AVERAGE $ EXPOSURE TO
PUBLIC COMPANY RISK:
+49%SINCE 2014
~118GLOBAL FILINGS BY
PUBLIC COMPANIES
IN 2015
Manually preparing for an analysis consumes valuable time: at least 3 hours per
public company, just to collect and standardize the data. For a hundred
companies with quarterly statements, that would take nearly 8 months of every
year!
Efficiency is an imperative. Work smarter, not harder, and automate your
processes. TIME IS MONEY.
“Financial data for public companies is
easy to gather and analyze.”
Myth #4
Payment history works to judge a private company's future ability to pay. But
don't depend on it to predict public company financial health. It's misleading.
Why? Public companies have more access to capital and financing than private
companies, so they’re able to pay on time — right up until filing Chapter 11. And
sometimes, they pay late because they can.
Don’t get surprised by public company financial stress. Use the right financial
metrics to stay ahead of risk.
Fact
Actually, you can’t. Payment data
underestimates public company risk.
“I can use payment data to understand
a public company’s financial health.”
Myth #5
353PUBLIC COMPANIES
$358bCOMBINED ASSETS
LAST SIX YEARS
OF BANKRUPTCY FILINGS:
+87%SINCE 2008
+46%SINCE 2014
U.S. PUBLIC
BANKRUPTCY RISK:
U.S. BUSINESSES ARE
MORE LIKELY TO
FAIL IN 2016
3X
+563%
INDUSTRY PUBLIC
BANKRUPTCY RISK:
IN OIL & GAS
MORE THAN
THE NORMAL RATE 8X
MUCH HIGHER RISK IN
TROUBLED INDUSTRIES
Fact
It’s inefficient to spend time on
gathering and spreading financials.
Get help uncovering your biggest risks:
https://creditriskmonitor.com
KNOW YOUR RISKS
You could be sitting on a ticking time bomb of public company risk, without realizing it.
CreditRiskMonitor predicts public company bankruptcy with 95% accuracy, helping you stay ahead of
significant risk.
GET A FREE RISK ASSESSMENT
SOURCES: CREDITRISKMONITOR, DR. EDWARD ALTMAN