Here's how to identify companies in crisis before it's too late

The whole crisis led Americanas to file for bankruptcy and still took many people by surprise, raising an important question: is it possible to identify companies in crisis before it is too late?

How to know if the company is facing a problem? High debt: 

One of the most alarming points is the increase in corporate debt, according to Vitorino Galindo, CNPI investment analyst and head of fundamental analysis at Quantzed, which is an analysis house and technology and financial education company for its investors. 

In addition to analyzing debt in isolation, it is important to check specific multiples and the solvency of the business, according to Régis Chinchilla and Luis Novaes, who are from Terra Investimento. Among them are: 

– Net Debt over Shareholders' Equity; 

– Net Debt over Ebitda and Ebit; 

- Current liquidity 

Analysis: The crisis of the big tech companies

Comparison with the Competition: 

Other signs that can be considered when analyzing whether a company is not doing well, according to Sebrae MS, are the profitability below the respective sectors and the growth of complaints from customers of companies in low productivity, in addition to debts concentrated in a short term. . 

Can rating agency ratings help? 

These rating agencies further help to indicate the financial situation, its projection and expectations for the financial health funds of all companies. 

“In the case of accounting fraud problems, such as at Americanas and IRB Brasil (IRBR3), things that are not in the audited statements cannot be known by anyone, not even the rating agencies”, he says. 

He also explains that the rating agencies project and still analyze the risks according to what was reported in the audited results. 

Examples of companies in crisis: 

There are still companies and sectors that analysts are concerned about in relation to leverage greater than the historical average, which is the case of airline companies, according to Terra Investimento. 

“To maintain their operations, they increased their debts and received capital contributions”, is what the house's specialists say. According to them, the large discount of these airline stocks in recent times demonstrates that the markets are aware of the challenging prospects of their sectors. 

But considering that not even the debt is something irreversible, as it is also a still adverse moment in the sectors or recoverable with the generation of cash from companies' operations. 

See the biggest cases of judicial recovery in Brazil

Being considered the largest judicial recovery in Brazil is the Odebrecht, which began its process in mid-2019, with a debt of more than R$ 80 billion. 

In recent years, there have also been several other cases of judicial recovery that have attracted a lot of attention in the market. An example of all this was OGX, which was created by Eike Batista, entered in 2013 with a debt greater than R$ 13,8 billion and left this process in mid-2017. 

Among the companies in crisis, Ricardo Eletro also filed for bankruptcy last year. Even so, in this case, the measure was suspended following a court decision. Since mid-2020, the company has been going through a judicial recovery. In July 2022, the estimated debt was BRL 4 billion.