Sears Canada

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Sears Canada's Chapter 11 restructuring is a reminder of the sustained pressures impacting the broader retail industry, and department stores in particular. The crowdsourced research behavior of CreditRiskMonitor's subscriber base helped signal the high financial risk attached to Sears Canada in the months leading up to its bankruptcy filing.

This Bankruptcy Case Study will present several other factors that warned of pending troubles, including an analysis of the retailer's financial statements and troubling news alerts. For instance, Sears Canada's quick ratio deteriorated from 0.68 to 0.37 times over the last five quarters, an early signal of liquidity problems. Collectively, these warning signals provided risk managers with an adequate window of opportunity to reduce their dollar exposure to the now-bankrupt department store.

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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 CreditRiskMonitor’s 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. CreditRiskMonitor's 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.