Over time, financial statements of public corporations show more losses, intangibles, and earnings restatements, which lower their value for predicting corporate bankruptcies
Corporate bankruptcies, like earthquakes, are rare events. But when they do occur, says Maureen F. McNichols of Stanford's Graduate School of Business, the results can be financially devastating for investors and other stakeholders.
This piece originally appeared in Stanford Business Insights from Stanford Graduate School of Business. To receive business ideas and insights from Stanford GSB click here: (To sign up: https://www.gsb.stanford.edu/insights/about/emails)