Does no one read this newsgroup?

[Wayne Brasch]

I can't believe no one has ever heard of the bankruptcy predictors that
exist. Does no one use them at all? If not, there's no wonder that so may
companies go bankrupt every year. This could be stopped.

Wayne Brasch

 

[Gregory L. Hansen]

I can't believe no one has ever heard of the bankruptcy predictors that
exist. Does no one use them at all? If not, there's no wonder that so may
companies go bankrupt every year. This could be stopped.

Wayne Brasch

I read this newsgroup. But I don't know much about accounting, and
nothing at all about bankruptcy predictors. Luckily I don't make
managerial decisions, either.

 

[DW]

I can't believe no one has ever heard of the bankruptcy predictors that
exist. Does no one use them at all? If not, there's no wonder that so may
companies go bankrupt every year. This could be stopped.

It's good to know somone on this group is so arrogant and all knowing
that they can predict when someone will go bankrupt.

Maybe it is a self fulfilling prophecy, you predict they will go belly
up so they feel there is now way out of the trap?

Maybe bankrupcy could be avoided if all knowing arogant people like you
didn't force people into bankrupcy when they ill informed decision
against
them based on information they plucked out of the air or dreamed up
last
night in their sleep.

I have to wonder if the people around here at the local banks want
people to fail and declare bankrupcy so they can swoop in and
take the property and turn around and make a killing selling it.
(Case in point: a local bank recently acquired by BOA who was
found to have predatory lending practices.)

Around here the real estate market is red hot. A couple of years ago
a bank could foreclose on a house for $200,000, now they can turn
around
and sell that house for $400,000 to $600,000 as the house values go
through
the roof.

 

[Catherine White]

I can't believe no one has ever heard of the bankruptcy predictors
that exist. Does no one use them at all? If not, there's no wonder
that so may companies go bankrupt every year. This could be stopped.

Wayne Brasch

I read the newsgroup, Wayne, and I remember you asking this question last
year. Didn't see the point in re-creating that answer. The poster "DW"
sure was an arrogant flamer, wasn't he?

Catherine

 

[John]

I can't believe no one has ever heard of the bankruptcy predictors that
exist. Does no one use them at all? If not, there's no wonder that so may
companies go bankrupt every year. This could be stopped.

Wayne Brasch

I know banks use bankruptcy predictors but I'm not sure how much it helps as
small company financials are not "GAAP", -- inventory misstated, cash flow
not provided, etc. and bank loan losses correlate with the economy. Having
a predictor (assuming it works) still doesn't get more sales, government
contracts, etc. Most business bankruptcies that I was familiar with knew
they were in trouble long before not paying creditors but couldn't expand or
cut expenses fast enough.

 

[___cliff rayman___]

Wayne Brasch wrote:


It's good to know somone on this group is so arrogant and all knowing
that they can predict when someone will go bankrupt.

Maybe it is a self fulfilling prophecy, you predict they will go belly
up so they feel there is now way out of the trap?

There are plenty of ways out of the trap, but the earlier you know that
you are stepping into one, the more options you have to deal with it.
When things are very late into the business crisis process, it becomes
much more difficult to handle. These BK predictors are actually
designed to be "early warning", like seeing a tumor right after it
starts and before the problems have been felt.

Maybe bankrupcy could be avoided if all knowing arogant people like you
didn't force people into bankrupcy when they ill informed decision
against
them based on information they plucked out of the air or dreamed up
last
night in their sleep.

I have to wonder if the people around here at the local banks want
people to fail and declare bankrupcy so they can swoop in and
take the property and turn around and make a killing selling it.
(Case in point: a local bank recently acquired by BOA who was
found to have predatory lending practices.)

Actually, the banks almost always lose money when they swoop in. They
are not allowed to keep the profit. Bankers are a pain in the ass,
because they try to be so careful, when a loan defaults, it usually
costs them.

Around here the real estate market is red hot. A couple of years ago
a bank could foreclose on a house for $200,000, now they can turn
around
and sell that house for $400,000 to $600,000 as the house values go
through
the roof.

If they wanted to make money in real estate, they would loan money to a
real estate investment company. When they foreclose, and they make a
profit on the sale, the excess profit has to be returned to the property
owner. The banks only receive their loan balance, past-due interest
and penalties, and their other costs for handling the foreclosure. This
is not a profit center for the bank, and a loan officer will not be
viewed well if he has too many of them in his portfolio.

--
_____cliff_rayman_____________________________________
Business Consulting and Turnaround Management
[web] http://www.rayman.com/
[web] http://all-clear-turnaround-management.com/
[eml] cliff --at-- rayman.com
[phn] 888-736-3802 x701
[fax] 818-743-7404
______________________________________________________

 

[___cliff rayman___]

(e-mail address removed)...




I know banks use bankruptcy predictors but I'm not sure how much it helps as
small company financials are not "GAAP", -- inventory misstated, cash flow


not provided, etc. and bank loan losses correlate with the economy. Having

bank losses correlate with the economy, but that doesn't mean they can't
be dramatically reduced. it helps to know which companies have a high
failure potential so things can either be rectified or losses reduced.

a predictor (assuming it works) still doesn't get more sales, government
contracts, etc. Most business bankruptcies that I was familiar with knew
they were in trouble long before not paying creditors but couldn't expand or
cut expenses fast enough.

Just because they didn't cut expenses fast enough, doesn't mean that
they couldn't have. Expansion is not a good idea for a business that is
in trouble. Usually it is better to make them smaller, more
efficient.and with better financial controls. Once everything is in
place and the business is throwing off cash, an expansion plan can be
resumed.

--
_____cliff_rayman_____________________________________
Business Consulting and Turnaround Management
[web] http://www.rayman.com/
[web] http://all-clear-turnaround-management.com/
[eml] cliff __at__ rayman.com
[phn] 888-736-3802 x701
[fax] 818-743-7404
______________________________________________________

 

[Wayne Brasch]

It's good to know somone on this group is so arrogant and all knowing
that they can predict when someone will go bankrupt.

Maybe it is a self fulfilling prophecy, you predict they will go belly
up so they feel there is now way out of the trap?

Maybe bankrupcy could be avoided if all knowing arogant people like you
didn't force people into bankrupcy when they ill informed decision
against
them based on information they plucked out of the air or dreamed up
last
night in their sleep.

DW, I am not an arrogant person. I am a person who truly cares about my
clients and their financial health. I'm just saying if more people such as
Cliff Rayman and myself would try to help small businesses as well as larger
ones, there would not be so much bankruptcy for companies to have to try to
work through. If a business person will allow someone like us help them,
they can turn their business around before disaster strikes them.

I don't think that is arrogance. That is just a desire to help attitude I
have.

Wayne

 

[Wayne Brasch]

I read the newsgroup, Wayne, and I remember you asking this question last
year. Didn't see the point in re-creating that answer. The poster "DW"
sure was an arrogant flamer, wasn't he?

Catherine

Catherine,

Thank you for your response. I am just trying to point out to all that
things can be done to prevent so much business failure. I wish we would all
adopt that desire to help attitude instead of just reporting to our clients
by giving them their financial statements and leaving it at that.

Wayne Brasch

 

[Wayne Brasch]

I know banks use bankruptcy predictors but I'm not sure how much it helps
as
small company financials are not "GAAP", -- inventory misstated, cash
flow
not provided, etc. and bank loan losses correlate with the economy.
Having
a predictor (assuming it works) still doesn't get more sales, government
contracts, etc. Most business bankruptcies that I was familiar with knew
they were in trouble long before not paying creditors but couldn't expand
or
cut expenses fast enough.

If they allow someone who knows what he/she is doing, the business can be
turned around before trouble really presents itself to the owners.
Accounting is a discipline that is powerful enough to help if the business
owner will allow it to do so.

Wayne Brasch

 

[Wayne Brasch]

I know banks use bankruptcy predictors but I'm not sure how much it helps
as
small company financials are not "GAAP", -- inventory misstated, cash
flow
not provided, etc. and bank loan losses correlate with the economy.
Having
a predictor (assuming it works) still doesn't get more sales, government
contracts, etc. Most business bankruptcies that I was familiar with knew
they were in trouble long before not paying creditors but couldn't expand
or
cut expenses fast enough.

These bankruptcy predictors I refer to do, in fact, work very well. You
would be surprised if you were to ever put some companies financial data
into one of them and see that they tell that company is in trouble long
before it happens. A case in point is Enron. If you had taken their
financial statements and run them through these predictors. you would have
seen that even back then their chances of bankruptcy within three years was
100%.

Wayne Brasch

 

[bobbie]

Hi Wayne,

OK, I'll bite....where would one find these predictors? My background
is in corporate sales, where I did very well because I took a personal
interest in helping my clients be successful in thier business. Now I
am in the process of changing careers to accounting and I am getting
ready to sit for the CPA exam (easier said than done at age 40!)

I would like to carry my consultative approach into my accounting
career and really provide my future clients with a solid "value-added"
package. I am interested in hearing more about this type of tool with
the understanding that the real value is the use and interpretation of
the data it provides. I have to say, however, that I was put off by
this string with your initial post. I'll assume, for the time being
anyway, that you are not an arrogant hot-head, just a bit frustrated.
Maybe you should start a new string discussing the value of these
predictors as you see it...I think there is a potential for a good
discussion here....Just a thought...

bobbie

 

[Wayne Brasch]

Hi Wayne,

OK, I'll bite....where would one find these predictors? My background
is in corporate sales, where I did very well because I took a personal
interest in helping my clients be successful in thier business. Now I
am in the process of changing careers to accounting and I am getting
ready to sit for the CPA exam (easier said than done at age 40!)

I would like to carry my consultative approach into my accounting
career and really provide my future clients with a solid "value-added"
package. I am interested in hearing more about this type of tool with
the understanding that the real value is the use and interpretation of
the data it provides. I have to say, however, that I was put off by
this string with your initial post. I'll assume, for the time being
anyway, that you are not an arrogant hot-head, just a bit frustrated.
Maybe you should start a new string discussing the value of these
predictors as you see it...I think there is a potential for a good
discussion here....Just a thought...

bobbie

Bobbie,

I'm neither an arrogant hot-head nor a bit frustrated. I am concerned that
so many accountants seem not to know nor care about trying to help their
clients beyond providing financial statements. This was the reason I left a
CPA firm and started my own practice back in 1980. All the firm I worked
for at the time wanted to do was to finish a client's work as quickly as
possible and run to the bank with their fee check from the work. They
really seemed not to care about any client beyond getting that money. I
don't deal with my clients in that manner. I care about each of them
personally as well as in a business sense. They know and appreciate this.
Consequently, the clients I started with back in 1980 are still very good
clients and they are always recommending me to others. This, over the
years, has kept me plenty busy. I have never had to pay a penny for
advertising to keep earning the kind of money that has provided a
comfortable level of living.

These bankruptcy predictors have been being developed since back in the
1960's. The first one was started by Dr. Edward Altman, a professor in New
York. His is about 95% correct in its predictions.

An internet search for bankruptcy predictors should provide you with
information on them. I can provide more information if you notify me by
email.

Wayne Brasch

 

[Ron Todd]

I can't believe no one has ever heard of the bankruptcy predictors that
exist. Does no one use them at all? If not, there's no wonder that so may
companies go bankrupt every year. This could be stopped.

Wayne Brasch

Human behavior being what it is, the access to knowledge has never
stopped people from making unwise and potentially fatal decisions.

 

[Wayne Brasch]

Human behavior being what it is, the access to knowledge has never
stopped people from making unwise and potentially fatal decisions.

Ron,

You are right about that, but I believe accountants owe it to their clients
to try to predict and prevent business disaster. That's what I do.

Wayne Brasch

 

[DW]

I read the newsgroup, Wayne, and I remember you asking this question last
year. Didn't see the point in re-creating that answer. The poster "DW"
sure was an arrogant flamer, wasn't he?

Where do you get off making a charge like that?

For the record I have clients who in past years had to make
emergency repairs on their house. The bank in question used
predatory lending practices to get these people to sign loan agreements
for like 35% that the bank knew the borrowers would never be able to
repay.

To make a long story short the AG nailed this bank a number of times.

I would also add some of these people bought their houses for
as little as $50,000 years ago and they are now being sold in a very
hot real estate market for upwards of $500,000+.

 

[DW]

DW, I am not an arrogant person. I am a person who truly cares about my
clients and their financial health.

I've found over the years for every well meaning accontant who wants
to help there are a dozen con men working at banks, posing as insurance
salesmen/financial advisors/etc. who would sell their mother into
slavery if it would make them money.

I'm now older than dirt and i'm absolutely disgusted with how many
con men are ready to swoop down like vultures in the name of helping
their
clients.

Around here we had alot of banks who ended up being taken over in
the bank scandal a few years back, many of them diliberately set up
loans so they would have to foreclose and acquire property in a
very hot real estate market.

Now all these years later, many of the crooks got away with murder,
alot
of people stole alot of money, and i'm absolutley disgusted by it.

You may well be honset in your dealings with your clients. But i've
come
accross too many frauds over the years.

And you know what is the worst part of it? Many of these poeple are
elderly
victims who in earlier years would have spotted these cons a mile away.
Now
they are victims of extremely sophisticated con men. And some of
these
are in deep financial trouble now and no bankrupcy prediction scheme
would
have ever predicted this outcome.

 

[Wayne Brasch]

Where do you get off making a charge like that?

For the record I have clients who in past years had to make
emergency repairs on their house. The bank in question used
predatory lending practices to get these people to sign loan agreements
for like 35% that the bank knew the borrowers would never be able to
repay.

To make a long story short the AG nailed this bank a number of times.

I would also add some of these people bought their houses for
as little as $50,000 years ago and they are now being sold in a very
hot real estate market for upwards of $500,000+.

DW,

I'm certainly not going to allow any of my clients to fall into theses types
of situations you are talking about. They are very bad. You are right,
too, in thinking that there are bad people in every profession-no matter
which one. For my business clients I try to help them keep their businesses
going since they put their time and efforts and money into them. The best
way to do this is to present to them a narrative that tells them how they
are doing and what they can do to help their business survive and grow the
way they want to have it happen. Changes are their decisions after getting
this information from me.

I have not meant to sound arrogant in any way in this thread, but I just
know that accountants can do more to truly help their clients-and the
clients deserve to know the accountant can help if allowed to do so. These
bankruptcy predictors I have mentioned are what I use to try to help.

Wayne Brasch

 

[Duane Bozarth]

Wayne Brasch wrote:
....

... A case in point is Enron. If you had taken their
financial statements and run them through these predictors. you would have
seen that even back then their chances of bankruptcy within three years was
100%.

If one knew anything about Enron's business model it was clear imo...as
simply a production lease-holder who happens to be in the area of
oil/gas production and knew a little of many of the outfits (such as
Northern Natural, for example) it was pretty clear that Enron was a
shell far before then...

 

[Wayne Brasch]

Dr. Woodard,

I tried to respond to the email you sent me about this topic of discussion.
It was returned to me. What I tried to tell you in that email was that I
provide bankruptcy prediction services for my clients at no charge. I do
this for their good-not mine- despite what you think. I sell them nothing
as I'm not trying to sell anything in this newsgroup discussion except the
idea that accountants should learn about these predictors and use them to
help their clients as I try to do.

For some reason, it seems to me that most of the people who read this
newsgroup have no idea that such bankruptcy predictors exist and how
accurate they really are.

Wayne Brasch