What You See Is Not What You Get, Always! A Distorted but True View of Company Financials when Distressed

Corporate failures and dismantling have become more and more widespread after the late 2007-2008 global crisis and individual as well as bulk numbers of multiple cases are almost as many, and the total economic impact more devastating since the Great Depression. In another study1 , I had discussed the importance of the roles of distressed non-financial firms in concert with the households in this crisis in a holistic network topological structure. In isolation though, the liquidation value of “the distressed firm” which is different from its going concern value, depending on what type, as well as the determination of financial and operational distresses, becomes a crucial part of the supervisory processes, also for investment purposes of banks and sole investors, if the firm does not recover from any of those.