financial distress prediction

Financial distress prediction involves identifying whether a company is at risk of failing or facing serious financial problems. Analysts use various data points, such as financial statements, past performance, and market conditions, to evaluate a company's health. By applying statistical models and indicators, they can forecast the likelihood of bankruptcy or significant downturns. This helps investors, creditors, and management make informed decisions, such as adjusting investments or improving financial strategies to avoid or mitigate potential issues. Understanding these predictions is crucial for maintaining business stability and safeguarding stakeholders' interests.