A study of 100,000 companies published today by business information agency Vision-net.ie has found that more than 38,000 are ‘high-risk’ and showing signs consistent with business failure.

Vision-net.ie also found that more than €1 billion of unpaid debt has been left behind so far this year by companies which have gone into liquidation.

Vision-net.ie defines high risk businesses as those deemed to be performing badly on a number of key business measurements.

These include deteriorating liquidity, reduced or negative cash flows, lower sales or profits, over reliance on debt, significant interest repayment burdens, poor stock control and other key balance sheet indicators.

The Vision-net.ie study was conducted over an 18-month period. It found an increasing number of high-risk companies in the hospitality and restaurant sector.

Vision-net.ie also found that firms incorporated within the last 10 years were facing the greatest trading difficulties. The average age of a company in the high-risk category was 9.73 years. Vision-net.ie says this suggests many of these companies were incorporated during the ‘boom’ years.

One-third of business failures are most likely to occur between the months of October and December, while 1,800 businesses are expected to go into liquidation this year.

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