Companies with debts & risk of default - is Baxter ok? (13Jun2023)
My investing muse I have been monitoring the debt situation and wonder if there are any companies at risk of default. With a 500 basis point interest rate surge in one year, interest expenses will be glaring in the books. With sticky inflation, the era of cheap financing looks to be over. For companies that require loans and overdrafts to get over business cashflow crunch, the surge in interest rate can eat into their margins. In fact, companies with many liabilities (debts) could be at risk. It is time for us to review our portfolio and look out for businesses with increased risk of default. Thus, I have started to research and the above is the list of companies sorted by the main filter of Debt/Equity ratio. Clorox, Home Depot & Baxter caught my attention. Baxter has a high Debt/equity ratio and is in the red (net income loss), with negative ROA, ROE and ROI. From investopedia: ROE and ROA are important components in banking for measuring corporate performance. Return on eq...