Time ran out for health retailer GNC Holdings, Inc. in their quest to shape up their balance sheet. The popular house of nutrition suffered mightily under the weight of debt.
During the coronavirus pandemic, nearly 40% of brick-and-mortar GNC locations in the U.S. have closed at least temporarily. COVID-19 arguably dealt the most crippling blow to the Pittsburgh-based chain, yet looking back further, the rise of e-commerce via Amazon and the loss of market shart to monolithic outfits like Walmart and Target - all which provided similar if not exact SKUs for discounted rates - had dwindled GNC's appeal.
CreditRiskMonitor subscribers would have seen a corporation long in distress, with GNC bottoming out to a FRISK® score of "1" earlier this year in April:
Additionally, our company produced a High Risk Report on GNC Holdings, Inc. several months ago which would have given our subscribers an in-depth look at the company's financial peril. More than 35% of the Fortune 1000 rely upon CreditRiskMonitor to stay ahead of public company bankruptcy risk.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at more than 35% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About Bankruptcy Case Studies
CreditRiskMonitor® Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using our proprietary FRISK® score, robust financial database, and timely news alerts.
In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. Our proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes 35% of the Fortune 1000 and thousands more worldwide.
Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor® Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.