It’s no surprise to conservatives that businesses and employers have been suffering under President Barack Obama’s detrimental economic policies.
More than a few companies have had to drastically downsize, declare bankruptcy or shut their doors altogether under the current administration, and there will be more of the same in the next year.
In fact, there are 30 large companies, including several household brands, that have been identified as “at risk” of bankruptcy in the near future, as determined by FindTheCompany, a corporate research site, according to KTVI.
More familiar companies on the list include stores such as Sears Holdings Corp., Sprint Corp., and J.C. Penney Co.
Others on the list were:
Applied Micro Circuits Corp., Viavi Solutions Inc., eGain Corp., Immunomedics Inc., Array BioPharma Inc., Quotient Ltd., Quantum Corp., Fidelity & Guaranty Life, Silicon Graphics International Corp., Barracuda Networks Inc., The Container Store Group Inc., SuperValu Inc., Lee Enterprises Inc., Meritor Inc., Accuray Inc., Elizabeth Arden Inc., Investors Real Estate Trust, Isle of Capri Casinos Inc., Layne Christensen Co., PTC Inc., HRG Group Inc., New York & Co., National Fuel Gas Co., Fifth Street Finance Corp., Coty Inc., Exar Corp., and Mallinckrodt PLC.
The researchers used a formula that was created by a New York University professor in the 1960s. Professor Edward Altman devised a four-part formula to predict which companies would go bankrupt within two years. The formula produced a single number for each company, called the Altman Z-Score.
The formula considers the following:
- Working Capital / Total Assets: companies with a low or negative score here will struggle to pay bills on time
- Retained Earnings / Total Assets: companies that rely on large amounts of debt and borrowing receive a low or negative score here
- Earnings Before Interest & Taxes (EBIT) / Total Assets: companies that bring in a small amount of revenue relative to their size receive low or negative scores
- Book Value of Equity / Total Liabilities: a low or negative ratio here indicates that the company may be using debt to finance growth, which can often lead to bankruptcy
According to a 2000 study, the score successfully predicted bankruptcy between 80 and 90 percent of the time up through 1999.
FindTheCompany used Altman Z-Scores to do the same analysis for 2016 companies. In order to qualify for the list, these companies had to have a market capitalization of at least $100 million.
Thankfully, this is the last year of Obama’s economic policies, but their ramifications will affect us for years to come. Hopefully, voters will make the right choice at the ballot box in November so that these detrimental policies are not continued.
Are you surprised to see any of these companies on the “at risk” list? Like and share on Facebook and Twitter and let us know.