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StockDiagnostics.com: Study Finds Negative OPS a Predictor of Possible Bankruptcy

Rumors of WorldCom's Demise Might be Premature

Wednesday, June 5, 2002
(1:54 PM ET)
StockDiagnostics.com Inc

StockDiagnostics.com has designed and built a proprietary data refinery that automates the process of collecting, sorting, and organizing large amounts of securities pricing and financial data into comparative financial ratios. These ratios are used to identify Financial Statement and securities pricing variances or anomalies and to continually monitor changes in the performance of public companies.

NEW YORK -- PRIMEZONE
The recent rumors swirling around beleaguered WorldCom (Nasdaq:WCOM - news) that it is teetering near bankruptcy just might be premature, according to a recent study conducted by StockDiagnostics.com, which has examined the pre-bankruptcy financial statements of bankrupt public companies.

StockDiagnostics.com, a company that has developed a proprietary software that tracks non-financial public companies' OPS (Operational-cashflow Per Share) based on the public filings of those companies, recently completed a research study on 75 public companies, including Enron and Polaroid, that filed for bankruptcy between 1999 and 2002. The purpose of the study was to determine the efficacy of OPS as a predictor of a public company's deteriorating financial health.

For inclusion in the study a public company had to file financial statements with the SEC for at least 10 quarters before filing for bankruptcy. A maximum of 20 quarters were looked at in the study if data was available. A total of only 75 companies out of 7,342 public companies met this requirement. The study found that 69 out of 75 companies reported at least two or more quarters of negative OPS in the 10 quarters prior to their bankruptcies. The remaining six companies each reported one quarter of negative OPS in the prior 10 quarters.

In the study, Enron (Pink Sheets:ENRNQ - news) had totals of 10 positive and 10 negative OPS quarters out of its last 20 quarters prior to its bankruptcy. Global Crossing (OTCBB:GBLXE - news) had negative OPS in three out of its last four quarters just before filing for bankruptcy, including its last filed quarter ending September 30, 2001. Suprema Specialties (Pink Sheets:CHEZQ), a New Jersey food company, led all companies in negative OPS with all 20 or 100 percent of its prior quarters indicating negative OPS.
(More: Biz.Yahoo!.com News Source)
2002 © PRIMEZONE.

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Dunno if this will be a good thing, or a bad thing. It’ll definitely require an attitude adjustment -- and the rich just got richer, again. With programs like this available to the high-rollers, an OPS savvy stockbroker becomes a must for any investment.

Dan