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Strategies & Market Trends : Bankruptcy Predictor Model

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To: Razorbak who wrote ()3/30/1999 8:45:00 AM
From: Bob Rudd  Read Replies (2) of 477
 
What key indicators might indicate running a Co. thru the models?
When Don asked about CPU, below, I recall they had a Debt/equity of about .56 and a big chunk of cash 4.40 per share on <$8 stock. This isn't one I'd want to spend time modeling.
Any suggestions on at-a-glance ratio's or indicator levels that put co in danger zone?
Just to get started here are some that are readily available [Except for bond yields]:
Long-Term Debt/Equity >1.5
Current ratio < 1.5
Bond yields > 15% [Depends on bond market - This guesstimate reflects recent increase in risk premiums that are now shrinking]
News of credit downgrades to well below investment grade [Moody's B or lower for example]
Big share price sell off in conjunction with any of above

The above are just quick guesstimates...please add or modify

Bob
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