In recent years we have seen multiple coal miner bankruptcies, but coal prices have made a significant resurgence. Don't be fooled, not all companies are in the clear. CreditRiskMonitor® has identified Colorado-based Westmoreland Coal Company as an operator with high financial stress and an elevated probability of bankruptcy. One important factor in this determination is the company’s FRISK® score of “1,” the worst possible risk category on this 96% accurate bankruptcy risk tool.
This High Risk Report on Westmoreland Coal Company will highlight the unique factors that have contributed to its poor financial condition. In fact, the company ranks in the bottom quartile relative to industry peers across a variety of metrics including performance, liquidity, and leverage. If you do business with Westmoreland, or are considering it, you'll want to take the time to read this report.
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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 High Risk Reports
Our High Risk Reports feature companies that are exhibiting a significantly high level of financial distress, as indicated by our proprietary FRISK® score.
The reports highlight the factors that have pushed a company's score lower on the "1" (worst) to "10" (best) FRISK® score, which is 96% accurate in predicting bankruptcy over a 12-month period. The High Risk Reports also includes analysis on financial indicators such as the company’s DBT index, stock performance, financial ratios and how it is performing relative to its industry peers.
The ultimate goal of the High Risk Report series is two-part: provide an early warning for those doing business with an increasingly distressed company and inform of the many signals that should be examined when assessing financial risks.