On Corporate Failures

Natwest WoodMac ‘s (now NatWest Markets) research concluded the following on corporate failures:

1. Aggressive expansion is a likely precursor to problems, particularly when this is accompanied by a rise in short term debt;

2. Dominant personalities often lead a company to doom;

3. Boardroom strife is also a leading indicator of trouble for companies;

4. Often fall comes after hype.

Interestingly this research was carried out in the early 90s. Subsequent events have only validated these conclusions.