Bankruptcy risk

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Bankruptcy risk

The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.

Bankruptcy Risk

The risk that an individual or especially a company may be unable to service its debts. Bankruptcy risk is greater when the individual or firm has little or no cash flow, or when it manages its assets poorly. Banks assess bankruptcy risk when considering whether to make a loan. It is also called insolvency risk.
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- financial risks manifested as indebtedness risk and debt default risks and liquidity, solvency, bankruptcy risks.
Auditors' decision-making process to issue a going concern opinion can be characterized as a two-stage process in which the auditor recognizes that a client firm faces bankruptcy risks, and the auditor uses subsequent information cues to determine whether to issue a going concern qualification (Mutchler 1985).
Our paper has the following main objectives: First of all, we aim to identify which financial indicators have a significant impact on the probability of a company to face bankruptcy risks expressed from the investors' perspective by studying the impact on the prospects of stocks' delisting from the stock exchange.
A company is typically known as a ' going concern' if it has sufficient resources to continue to operate indefinitely and to avoid any potential bankruptcy risks. Vijay Mallya- led troubled carrier Kingfisher Airlines ( KFA) has faced the most stringent set of adverse auditor comments, while auditors for Naresh Goyal- led Jet Airways and Maran family- run Sun Group's Spicejet have also commented on their ' going concern' status.
Tokyo stocks slid Monday as the central bank downgraded its view on the Japanese economy, but the bleak economic prospects sent rail operators and utilities sharply higher as investors shifted funds to firms with the least bankruptcy risks.
The key to an asset securitization is removing the receivables from the bankruptcy risks of the originator by selling the receivables in a "true sale" to an entity that is "bankruptcy remote".
Financial leverage and bankruptcy risks are cornerstones of financial theory (Altman, 1983; Gordon, 1971; Stiglitz, 1972).
* what bankruptcy risks are raised or reduced by entering into the workout.
Share prices on the Tokyo Stock Exchange plunged Monday, pushing the benchmark Nikkei Stock Average down 3%, as the market remained cautious about bankruptcy risks despite hopes for positive effects from the weekend birth of a daughter to Crown Prince Naruhito and Princess Masako.
If we can ensure that the creditor faces a single bankruptcy regime, and thus a single set of bankruptcy risks, the amount of lending and borrowing will be closer to the efficient level than if the applicable bankruptcy regime varies according to the identity of the debtor.
However, Teikoku Databank warned many small and midsize firms, hounded by slumping revenues and debts, still face bankruptcy risks, as foreign economies that have been destinations for Japanese exports are slowing, with the yen's strength undercutting exporters.
Unfortunately, the Obama administration's decision to put the unions ahead of secured debt-holders in the orchestrated Chrysler bankruptcy risks rapturing the basic fabric of credit markets.