Parker Drilling Company

2018 proved to be a calamitous year for the Parker Drilling Company. A provider of contract drilling, as well as rental tools and services, PDC was highlighted by CreditRiskMonitor®six months before their eventual Chapter 11 filing as a public company fraught with bankruptcy risk.

Despite being a leader in their industry, with operations in 19 different countries, the Houston-Based outfit was choked by more than a half a billion dollars in debt in 2018 and sunk to a FRISK® score of "1," never to rebound:

Parker FRISK image

This Bankruptcy Case Study will take you through the years-long spotlight the FRISK® score placed upon the Parker Drilling Company, who saw operating and net losses in each of their last five fiscal quarters. Additionally, PDC's leverage ratios - total debt in relation to tangible net worth, total liabilities to equity, and total liabilities to tangible net worth as core line items - worsened considerably during the same time period.

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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%: 235 identified out of 243 bankruptcies. 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.