Sort Credit Signals Before You Trust Spread
Classify distress indicators using the logic behind Altman Z-score components.
Sort each credit signal into the distress-risk bucket it primarily informs. Liquidity Solvency Profitability Market buffer Working capital turns negative before a bond maturity Total liabilities rise while retained earnings remain negative EBIT divided by total assets falls for three straight years Market value of equity falls close to book value of total liabilities Current ratio weakens as revolver availability shrinks Interest expense consumes most operating income Debt-funded acquisitions lift liabilities faster than asset productivity Equity market cap collapses after covenant-waiver news
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