AG&E Holdings Inc filed for bankruptcy protection October 18th with a Financial Health Rating (FHR) of 23, High Risk. The company is a major supplier of electronic components and technical labor in the gaming industry, and first entered High Risk early 2017 following a 2016 merger with Advanced Gaming Associates.
What the ratings tell you
The FHR of 23 is towards the weaker end of the High Risk category (20-39), and the probability of default associated with a 23 is 7.4%. This signals the need for a risk mitigation strategy. Further, the Core Health Score, or CHS, is 19 (Very Poor Health). When the CHS is low then the company has not reached a position of sustainable operations, and a poor FHR tells you the company's balance sheet was not able to provide sufficient resilience to offset the weak Core Health.
An FHR of 23 put AG&E Holdings clearly signals the company has an elevated risk of default.
We combine both the FHR and CHS into a quadrant analysis. Companies with a poor FHR and CHS fall into the most concerning quadrant, where we recommend beginning risk mitigation.
Where our analysis tells the story
Our standard analysis provides you with both the FHR and CHS benchmarked against the company's sector average. AG&E showed considerable underperformance in each metric.
Our Financial Dialogue was also very direct in identifying areas of concern for further analysis. This report suggested lines of questions related to cash production and cash balances, and leverage and interest coverage.
Clients can view reports for AG&E Holdings on our client portal.