Chapter 2. Executive Summary

Most sick businesses were once healthy. As you might expect, financial executives of healthy businesses want to help keep them that way. Know what can kill you, because otherwise it will—is the operative message.

This is not always as simple as it seems in hindsight. One reason for this study is to identify the causes of companies’ financial woes more precisely than past studies have done. The financial executive of a healthy organization who recognizes the symptoms of trouble early enough to effect a cure is much less likely to end up with a sick company.

To avoid findings relevant to only one industry, we looked at 20 companies in five major industry sectors. We also wanted to identify effective strategies for reversing ...

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