Why Companies Fail: Strategies for Detecting, Avoiding, and Profiting from Bankruptcy

by
Edition: 2nd
Format: Paperback
Pub. Date: 1999-01-01
Publisher(s): Lightning Source Inc
List Price: $34.95

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Author Biography

Harlan D. Platt is Professor of Finance in the College of Business Administration at Northeastern University. He is the author of two other books. The First Junk Bond and Principles of Corporate Renewal, and has published over 35 academic articles. Professor Platt is also the faculty dean of the Turnaround Management Association where he created and administers its certification program. He serves on the board of directors of Prospect Street High Income Portfolio, Inc., listed on the NYSE, and VSI Enterprises, Inc., on the NASDAQ, and is president of 911RISK, Inc., a firm specializing in developing analytical models that predict corporate distress.

Table of Contents

Figures
xi
Tables
xiii
Preface and Acknowledgments xvii
Challenging the Propensity to Fail
1(12)
Characterizing Business
2(4)
Characterizing Failure
6(3)
The Route away from Failure
9(4)
Financial Reasons for Failure
13(4)
Getting Caught in the Cash-Flow Cycle
17(12)
Charter
20(1)
Lionel
21(8)
Getting Buried under Current Assets
29(8)
Bowmar Instruments: Too Many Current Assets
31(3)
W.T. Grant: Too Many and Then Too Few Current Assets
34(3)
Getting Squeezed by Equipment
37(14)
Braniff Airways
43(1)
International Harvester
44(7)
Getting Lost with Too Little Capital
51(18)
Comparing High Debt to High Equity
53(3)
Comparing Debt Levels across Firms
56(1)
Deciding When There Is Too Much Debt
57(2)
Dome Petroleum: Waiting Too Long to Sell Stock
59(3)
Computer Devices: The Case of David against Goliath
62(7)
Getting Pinched by Short Term Debt
69(12)
Interest for Risk: The Yield Curve
69(3)
Ten Steps to Bankruptcy
72(1)
Wickes
73(8)
Detecting Future Bankruptcies
81(12)
Using Common Sense
82(2)
Detecting Failures with Financial Ratios
84(4)
Statistical Methods
88(5)
Strategies for the Near-Bankrupt
93(14)
Strategies That Might Help
94(1)
Asset Maneuvers: Storage Technology, Pan American Airways, Crompton
95(2)
Liability Maneuvers: Mattel, Chrysler, Sonoma Vineyards, Astro Drilling, Holywell
97(5)
Company Maneuvers: Eagle Computer, Farah Manufacturing, Frontier Airlines, Wien Airlines, Data Terminal Systems
102(5)
Investing in Bankrupt Companies
107(8)
Three Rules for Bankruptcy Investing
107(3)
Using Portfolios
110(1)
Choosing Which Bankrupts to Buy
110(5)
Conclusion
115(4)
The Lessons of Bankruptcy
115(1)
The Strategic Use of Bankruptcy
116(3)
Appendix A: The Failure Record 119(10)
Appendix B: Basic Accounting for Nonfinancial Readers 129(8)
Notes 137(2)
Glossary 139(2)
Bibliography 141(2)
Index 143(6)
About the Author 149

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