Fragility and Resilience Screening System

The spread of COVID-19, one of the greatest risks to humankind, has forced governments to enforce strict social distancing measures and lock down cities and countries. Businesses across many industries have been shut due to this crisis, as various areas such as travel, tourism, and international trade have been severely disrupted.

On 14^th April 2020, the International Monetary Fund (IMF) reported that all the G7 nations had already entered or were entering into a recession. There are reasons to believe the ongoing recession is likely to be worse and more long-lasting than the 2007-2009 recession. The COVID-19- related health crisis is still underway, and it could take years to develop a vaccine. We believe that it is impossible for economics to predict an end to this recession until countries contain the COVID-19 health crisis. Recessions are detrimental to most companies, and they are deadly for some companies. Therefore, in these uncertain times it is rather important to rank the companies based on their bankruptcy risk.

In this insight we try to develop a screening system to identify the potential bankruptcy candidates and the most resilient companies.