Hooper Holmes Inc., a health screening and laboratory testing company, filed for Chapter 11 bankruptcy restructuring on Aug. 27, 2018. Its dire financial condition was signaled by its FRISK® score of “1,” the worst possible rating, for more than a year. The FRISK® score is 96% effective in predicting financial stress and bankruptcy risk in public companies, and is used by thousands of risk professionals.
This Bankruptcy Case Study evaluates a variety of factors that eventually caused this healthcare company to file for bankruptcy. Despite more than doubling net sales over the last five years, with the help of its Provant Health merger, the company was unable to control costs and had persistent cash flow problems. This weakness eventually led the company to breach a covenant on its term loan. Credit professionals can use the CreditRiskMonitor service to help identify financial risk exposure such as this with enough time for proactive risk mitigation.
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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.