How Do You Find Out If A Company Is Going Bankrupt?
Many companies planning to file for bankruptcy keep such affairs close to their company chest. As a result, it may be difficult for you to find out if a company intends to file bankruptcy before a petition is filed in a bankruptcy court. There are, however, pre-petition indicators, or what Benjamin Graham, author of “The Intelligent Investor: The Definitive Book on Value Investing,” describes as “past record to judge future safety.” Review the financials. Companies have no duty to make a pre-petition disclosure and will often file without warning to interested parties. Technically, insolvency is when liabilities outweigh assets. If a company’s current assets are at least twice its current liability, the firm has sufficient working capital to weather hard times. Watch the company website for news releases and conduct periodic searches with the company name and the word “bankrupt.” Better yet, set up e-mail alerts with this search query. Inquire whether the company is meeting payroll in
