Everything's bigger in Texas -- including debt in public companies. Oil & gas leader Jones Energy, Inc. has filed for bankruptcy, and our subscribers saw it coming well in advance.
We covered the plight of the Austin-based company with a High Risk Report back in October of 2018. At the time of the release of the report, Jones Energy was showing a FRISK® score of "1," indicating up to a 50% chance that the company would meet bankruptcy inside of 12 months' time. That score never changed in the six-month period between the report's release and Jones Energy's Chapter 11 filing:
This Bankruptcy Case Study looks with a critical eye on why Jones Energy was unable to save itself from its cumbersome debt load and significant loss of working capital. The energy sector remains one of the hardest hit in the United States as far as public company bankruptcy is concerned in recent years.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at nearly 40% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About Bankruptcy Case Studies
CreditRiskMonitor® Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using our proprietary FRISK® score, robust financial database, and timely news alerts.
In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. Our proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes nearly 40% of the Fortune 1000 and thousands more worldwide.
Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor® Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.