Zalemark Holding Co Inc (ZMRK)

[fact-checker]

Telltale signs of an impending bankruptcy. Part 3.

All of these signs point to a Zalemark bankruptcy.

From a USA Today article by financial writer Matt Krantz.

•Rising interest expenses as a percentage of revenue. Companies don't automatically go bankrupt, even if they're losing money. What does them in is that debt loads that looked fine when things were going good, suddenly turn onerous as revenue and profit falls. The tipoff is interest expense rising as a percentage of revenue.

•The management shuffle. As a company starts running into more serious trouble, the board and investors start looking for people to blame. Typically, you'll start to see lots of turnover at the top ranks, as investors look for a quick fix. Getting delisted from a major exchange, like the New York Stock Exchangeor Nasdaq, is typically common at this phase, too.

•The auditor shuffle. Once the board realizes that the problem isn't the CEO, but the company's business model, things have already deteriorated significantly. Typically, at this point you'll see notices in the annual report and other regulatory filings that the company has replaced or disagreed with its accountants and auditors. This is a very bad sign.