Investing in stocks requires choosing companies with long-term potential. However, just as important as identifying winners is recognizing warning signs that a company is failing. Companies don’t collapse overnight—there are always red flags that indicate trouble well before bankruptcy or significant stock declines.
As a buy-and-hold investor, avoiding financially distressed companies can save your portfolio from costly mistakes. In this guide, we’ll walk through the top warning signs of a failing company, real-world examples, and how to research a stock before investing.
Table of Contents
- Declining Revenue & Profit Margins
- Rising Debt & Weak Balance Sheet
- Negative Cash Flow
- Shrinking Market Share & Competitive Struggles
- Poor Capital Allocation
- Frequent Stock Price Declines Without Recovery
- Insider Selling & Lack of Insider Buying
- Dividend Cuts
- High Executive Turnover
- Unethical Behavior & Legal Troubles
- How to Research a Company’s Financial Health
- Common Mistakes to Avoid
- Actionable Takeaways – Spotting Troubled Companies
- Conclusion
1. Declining Revenue & Profit Margins – One of the Key Warning Signs
A company’s top line (revenue) and bottom line (net income) are among the most critical indicators of financial health. A strong company should show consistent or growing revenue over time, demonstrating demand for its products or services. However, if revenue and profits are declining for multiple quarters or years, it may be a sign of deeper structural problems.
Why Declining Revenue is a Warning Sign
📉 Losing Customers to Competitors – If a company’s sales are shrinking while competitors are growing, it may indicate a loss of market share. Newer, more innovative companies may be attracting customers away.
📉 Decreasing Demand for Products/Services – Changes in consumer preferences, outdated products, or technological disruption can cause long-term revenue decline. Companies that fail to adapt may struggle to recover.
📉 Poor Pricing Strategy or Weak Brand Loyalty – If a company relies too much on price cuts to drive sales, it may indicate weak demand or low customer loyalty, which can erode profit margins over time.
Case Study: Sears Holdings (SHLDQ) – A Decade-Long Decline
🔎 Sears was once a retail giant, but as e-commerce and discount retailers gained traction, its revenue steadily declined. The company failed to innovate and adapt to changing consumer habits, losing customers to competitors like Amazon (AMZN) and Walmart (WMT). By 2018, after years of falling sales, Sears filed for bankruptcy.
How to Check Revenue Trends
✅ Compare revenue trends over several years – A one-time drop may not be alarming, but a multi-year decline is concerning.
✅ Review industry competitors – If a company’s peers are growing but it is shrinking, it may indicate a fundamental problem.
✅ Use reliable financial sources – Track revenue trends using:
📖 Related Article: How to Read an Income Statement – A Beginner’s Guide for Stock Investors
Key Takeaway
A long-term decline in revenue is one of the clearest warning signs that a company is failing. Investors should carefully analyze financial statements, monitor industry trends, and compare competitors before investing in a company with shrinking sales
2. Rising Debt & Weak Balance Sheet – A Silent Portfolio Killer
Debt can be useful when managed responsibly, helping companies fund expansion, research, and acquisitions. However, excessive debt can become a ticking time bomb, especially if revenue declines or interest rates rise. A weak balance sheet with high debt levels increases financial risk and limits a company’s ability to withstand economic downturns.
Key Debt Red Flags for Investors
📉 High Debt-to-Equity Ratio – A debt-to-equity (D/E) ratio above 2.0 is often a warning sign that a company relies too heavily on borrowed money rather than shareholder equity. High D/E ratios indicate financial leverage but also increase bankruptcy risk if earnings decline.
📉 Low Interest Coverage Ratio – The interest coverage ratio (EBIT/interest expense) measures how easily a company can pay interest on its debt. A ratio below 1.5 suggests the company struggles to cover interest payments, making it vulnerable in economic downturns.
📉 Frequent Refinancing or Rising Debt Levels – If a company continually refinances or increases its debt burden without improving cash flow, it may be delaying financial troubles rather than fixing them.
Case Study: Toys “R” Us – A Cautionary Tale of Debt Mismanagement
🔎 Toys “R” Us was once a dominant toy retailer, but a leveraged buyout in 2005 loaded it with billions in debt. The company struggled to meet interest payments, and as online competitors like Amazon (AMZN) gained market share, revenue declined. With no financial flexibility, Toys “R” Us filed for bankruptcy in 2017 after failing to restructure its debt.
How to Identify Debt Risks Before Investing
✅ Check the balance sheet – Compare total debt to shareholder equity and assess debt trends over time.
✅ Review the interest coverage ratio – If EBIT barely covers interest expenses, the company may be financially unstable.
✅ Look for companies issuing new debt frequently – If a company keeps borrowing to stay afloat, it may signal financial distress.
📖 Related Article: Why Avoiding Debt-Heavy Companies Can Protect Your Investments
Key Takeaway
A strong balance sheet is essential for long-term stability. Avoid companies that carry excessive debt without sufficient cash flow to support it. High debt can turn a once-promising investment into a financial disaster
3. Negative Cash Flow – A Major Warning Sign for Investors
A company can report profits on paper but still struggle to survive if it is burning through cash. Cash flow is the lifeblood of a business—it ensures that a company can pay employees, cover expenses, and invest in future growth. When a company consistently spends more cash than it generates, it may eventually face bankruptcy or severe financial distress.
Why Negative Cash Flow is Dangerous
💰 Operating Cash Flow Must Be Positive – A company’s operating cash flow (OCF) measures how much cash is generated from day-to-day business operations. If OCF is negative for extended periods, it may indicate the company is relying on debt or stock sales to stay afloat.
💵 Free Cash Flow Shows True Financial Strength – Free cash flow (FCF) is the cash left after capital expenditures (such as buying equipment or investing in new facilities). If a company consistently reports negative FCF, it may struggle to fund growth or maintain operations.
Case Study: WeWork’s Cash Flow Crisis
🔎 WeWork (WE) serves as a cautionary tale of negative cash flow. Despite rapid expansion and high revenue growth, the company never achieved positive cash flow. It relied on investor funding to cover operating losses, leasing expensive office spaces without generating sustainable profits. Eventually, as investor confidence waned, WeWork’s valuation collapsed, and the company faced financial turmoil.
How to Identify Cash Flow Problems
✅ Check the cash flow statement in quarterly and annual reports.
✅ Compare operating cash flow to net income—if profits are rising but cash flow is negative, there may be hidden issues.
✅ Look for companies issuing excessive debt or stock to raise cash—this often signals trouble.
📖 Related Article: Why Cash Flow Is King – Understanding a Company’s True Financial Health
Key Takeaway
A company with consistent negative cash flow is at risk of running out of money—even if it appears profitable on paper. Strong cash flow ensures financial stability and long-term survival, making it a critical factor in evaluating investments.
4. Shrinking Market Share & Competitive Struggles: Key Warning Sign
A company’s ability to maintain or grow its market share is essential for long-term success. When a business starts losing customers to competitors, it’s a major warning sign that the company is failing. Declining market share can result from:
- Failure to adapt to changing consumer preferences
- Technological disruption rendering products or services obsolete
- Weak branding or loss of competitive advantage
- New market entrants offering better pricing, convenience, or innovation
- Operational inefficiencies that drive customers toward competitors
A company struggling with shrinking market share often faces declining revenue, reduced pricing power, and mounting financial difficulties, making it a risky investment for buy-and-hold investors.
Case Study: Blockbuster vs. Netflix
One of the most famous examples of a company losing market share due to failure to adapt is Blockbuster. At its peak in the early 2000s, Blockbuster was a dominant force in the video rental industry, with thousands of locations worldwide. However, the company refused to embrace digital transformation and dismissed the potential of streaming services.
Meanwhile, Netflix (NFLX), initially a DVD rental-by-mail service, recognized the shift in consumer behavior and pivoted toward streaming technology. By investing in a subscription-based streaming model, Netflix not only took market share from Blockbuster but also transformed the entire entertainment industry.
Key Takeaways for Investors
📉 If a company is losing market share, investigate why. Is the decline due to temporary industry conditions, or does the business face an irreversible trend?
🔍 Look at competitive positioning. Does the company still offer something unique, or is it being overtaken by more innovative players?
🚨 Watch for management’s response. Are they actively investing in modernization, or are they stuck in outdated strategies?
🔎 Related Article: Netflix vs. Blockbuster – A Case Study in Disruption and Adaptation for Buy-and-Hold Investors
Understanding how companies respond to competitive threats and industry shifts can help investors avoid buying into declining businesses and instead focus on companies with sustainable competitive advantages.
5. Poor Capital Allocation – How Bad Investments Can Sink a Company
One of the most overlooked warning signs a company is failing is poor capital allocation—how a company chooses to spend its cash and deploy resources. Strong, well-managed companies allocate capital efficiently to maximize long-term shareholder value, while struggling businesses often waste money on bad acquisitions, reckless stock buybacks, or inefficient spending.
Key Ways Poor Capital Allocation Can Harm a Company
🔴 Overpaying for Acquisitions
Companies sometimes acquire other businesses to expand their market reach, eliminate competitors, or enhance their product offerings. However, when a company overpays for an acquisition or buys a failing business, it can create massive financial strain.
- Acquisitions should generate synergies, meaning the combined companies should be more valuable together than separately.
- If a company overestimates potential cost savings or revenue growth, the deal can quickly turn into a financial disaster.
- Acquisitions often involve taking on huge amounts of debt, which can weaken a company’s balance sheet.
🔎 Example: General Electric (GE) made multiple costly acquisitions, including its $9.5 billion purchase of Alstom’s energy business in 2015. The deal was poorly timed, as demand for fossil-fuel-based power plants was declining, leaving GE with a struggling business unit.
📖 Related Article: The Rise and Fall of General Electric (GE) – Key Lessons for Long-Term Investors
🔴 Reckless Stock Buybacks
Stock buybacks can be a smart way to return value to shareholders if a company’s stock is undervalued and its financials are strong. However, when companies buy back shares at inflated prices or use debt to finance repurchases, it can backfire.
- If a company spends billions on stock buybacks instead of investing in business growth, it can weaken future earnings.
- Some companies prioritize buybacks over dividends, R&D, or debt reduction, which can be a red flag.
- Companies that aggressively repurchase shares during good times may have to suspend buybacks or even issue new shares during downturns, diluting shareholders.
🔎 Example: Boeing (BA) spent $43 billion on stock buybacks from 2013 to 2019, depleting its cash reserves. When the 737 MAX crisis hit, Boeing had to take on billions in debt instead of using internal funds to recover.
🔴 Misallocation of Resources
- Expanding too aggressively into unprofitable markets
- Investing in low-demand products or outdated technologies
- Excessive executive compensation while the company underperforms
🔎 Example: WeWork (WE) spent billions on lavish office spaces and executive perks, despite never being profitable. Investors eventually lost confidence, and the company collapsed in value.
Key Takeaways for Investors
📌 Check capital allocation decisions in earnings reports and 10-K filings.
📌 Be cautious when companies take on debt for acquisitions or buybacks.
📌 Look for businesses that reinvest in growth while maintaining strong financial discipline.
A well-managed company focuses on long-term value creation rather than short-term stock price manipulation. Always analyze how a company spends its cash before investing.
6. Frequent Stock Price Declines Without Recovery – A Major Warning Sign
A stock’s long-term decline can be a major warning sign a company is failing. While short-term market fluctuations are normal, consistent underperformance compared to competitors suggests deeper issues, such as:
- Declining revenue and profitability
- Increasing debt and cash flow problems
- Loss of market share to stronger rivals
- Poor leadership or failed strategic decisions
Case Study: Bed Bath & Beyond (BBBY)
Once a dominant home goods retailer, BBBY struggled to compete with e-commerce giants like Amazon (AMZN). Instead of investing in online sales, management focused on stock buybacks, worsening its financial position. As revenue declined, the company took on heavy debt, ultimately leading to bankruptcy in 2023 after its stock collapsed from $80 in 2014 to nearly zero.
How to Spot Failing Stocks Before It’s Too Late
🔎 Compare stock performance with industry peers—if competitors are growing while a stock is in steady decline, it’s a red flag.
🔎 Analyze financial statements—declining earnings, increasing debt, and negative cash flow suggest deeper problems.
📖 Related Article: How to Spot Undervalued Stocks Like Warren Buffett
A falling stock price with no signs of recovery often signals weak fundamentals. Investors should dig deeper into financials, industry trends, and insider activity before investing in a struggling stock
7. Insider Selling & Lack of Insider Buying – A Warning Sign for Investors
Company executives and insiders have access to critical financial insights before the public, so their trading activity can reveal confidence—or concern—about the company’s future. While occasional insider sales are normal, consistent or large insider selling—especially without insider buying—can be a red flag.
Why Insider Selling Can Be a Warning Sign
📉 Lack of Confidence in Future Growth – If insiders expect declining revenue or profitability, they may start selling.
📉 Hidden Financial Issues – Insiders might know about upcoming struggles, such as falling demand or regulatory risks.
📉 Overvalued Stock – Executives may cash out at high valuations before a downturn.
📉 Weak Business Strategy – Leaders selling shares instead of buying can indicate uncertainty about the company’s direction.
When Insider Selling Becomes Concerning
🚨 Multiple executives sell shares simultaneously – A single sale may not mean much, but if the CEO, CFO, and board members are selling, it raises concerns.
🚨 No insider buying over time – If insiders never buy shares, it suggests they don’t believe in the company’s future upside.
🚨 Selling before bad news – Executives sometimes sell before earnings misses, financial struggles, or regulatory fines become public.
🚨 Insiders selling while the stock price is falling – If leaders aren’t buying their own stock at lower prices, why should investors?
Case Studies of Insider Selling Before Collapse
🔎 Enron (ENRNQ) – Executives Sold Before Bankruptcy
Before Enron’s 2001 collapse, insiders dumped shares while publicly promoting the company. Shortly after, fraud was exposed, leading to bankruptcy.
🔎 Bed Bath & Beyond (BBBY) – Insider Selling Before Bankruptcy
As BBBY’s financial health deteriorated, executives sold large stock positions instead of investing in a turnaround. The company later went bankrupt.
📊 Insider Screener – A tool for tracking executive trading activity.
📖 Related Article: Why Insider Buying and Selling Matters in Stock Research
Key Takeaways
✅ Frequent insider selling is a red flag, especially when multiple executives sell at once.
✅ A lack of insider buying suggests insiders don’t see value in the stock.
✅ Use insider trade tracking tools to inform investment decisions.
While insider selling alone isn’t a reason to sell a stock, when combined with poor financials, stock declines, and leadership concerns, it can be a warning sign that signals deeper issues
8. Dividend Cuts – A Clear Warning Sign of Financial Trouble
For many investors, dividends are a sign of financial stability and steady cash flow. Companies that consistently pay and grow dividends are often profitable and well-managed. However, when a company cuts or suspends its dividend, it’s usually a major warning sign that it’s struggling financially.
Why Do Companies Cut Dividends?
🔴 Cash Flow Problems – A company may not have enough cash to cover both operational expenses and dividend payments.
🔴 High Debt Burden – If a company takes on too much debt, it may need to redirect cash from dividends to pay down liabilities.
🔴 Declining Profits – Companies with falling earnings may cut dividends to conserve resources.
🔴 Poor Capital Allocation – Sometimes, a company prioritizes acquisitions or stock buybacks over paying shareholders.
Case Study: General Electric (GE)
🔎 In 2017, General Electric (GE) slashed its dividend by 50%—only the second cut in its history. The company faced declining profits, excessive debt, and poor capital allocation, forcing it to conserve cash. This was a major red flag for investors, as GE’s financial struggles continued, leading to further dividend cuts and a significant stock price decline.
How to Spot a Potential Dividend Cut
🚨 Payout Ratio Over 80% – If a company is paying out nearly all its earnings as dividends, it may not be sustainable.
🚨 Declining Free Cash Flow – A company must generate enough cash to cover dividends and reinvest in growth.
🚨 Rising Debt Levels – Companies prioritizing debt payments over dividends may cut payouts.
📖 Related Article: Selling a Dividend Stock? 3 Warning Signs You Must Know
Key Takeaway
If a company cuts its dividend, it’s often a sign of deeper financial problems. Dividend investors should monitor cash flow, debt levels, and payout ratios to avoid stocks at risk of cutting their payouts.
9. High Executive Turnover – A Warning Sign of Instability and Trouble
A company’s leadership plays a critical role in its success. When top executives, especially the CEO or CFO, frequently resign or are forced out, it can signal deep internal problems. High executive turnover disrupts strategic direction, lowers investor confidence, and often precedes financial struggles.
Why Frequent Executive Turnover is a Red Flag
🚨 Lack of Stable Leadership – Frequent leadership changes prevent long-term planning and execution, leading to inconsistent decision-making.
🚨 Internal Conflicts – A revolving door of executives may indicate boardroom disputes, power struggles, or misaligned priorities between management and shareholders.
🚨 Financial or Legal Troubles – Executives sometimes resign before bad financial news becomes public, signaling deeper issues within the company.
🚨 Loss of Investor Confidence – Institutional investors watch executive turnover closely. Repeated leadership exits may trigger stock sell-offs and lower valuation.
Case Study: WeWork’s CEO Ouster
🔎 WeWork’s CEO Adam Neumann was forced out after reckless spending, extravagant personal perks, and failed corporate governance. The company was set for an IPO, but concerns over Neumann’s leadership and unsustainable business model led investors to withdraw support. WeWork’s valuation collapsed, and it struggled to recover.
How to Identify Executive Turnover Risks
✅ Watch for multiple resignations in key roles (CEO, CFO, COO) within a short time frame.
✅ Investigate why executives are leaving—personal reasons, performance issues, or deeper company problems?
✅ Look at a company’s corporate governance structure—are there board conflicts or activist investor pressure?
📖 Related Article: Evaluating Management Teams and Corporate Governance – A Key to Long-Term Investment Success
Key Takeaway
Frequent executive departures often signal deeper financial or operational challenges. Investors should investigate leadership changes carefully, as companies with unstable management often struggle to deliver long-term success.
10. Unethical Behavior & Legal Troubles – A Major Warning Sign for Investors
A company’s long-term success depends not just on its financial health but also on ethical leadership and legal compliance. When a company engages in fraud, regulatory violations, or unethical business practices, it often signals serious financial instability and can lead to huge losses for investors.
Why Ethical and Legal Issues Are a Major Warning Sign
🚨 Accounting Fraud & Financial Misreporting – Companies that manipulate financial statements to hide losses or inflate profits eventually get exposed, leading to stock crashes or bankruptcy.
🚨 SEC Investigations & Regulatory Violations – When the Securities and Exchange Commission (SEC) or other regulators investigate a company, it often uncovers problems like insider trading, financial misconduct, or securities fraud.
🚨 Lawsuits & Scandals – Legal battles, whether due to corporate fraud, misleading investors, or unethical business practices, can damage a company’s reputation and drain financial resources.
Case Study: Enron – One of the Biggest Corporate Frauds in History
🔎 Enron (ENRNQ) was once one of the largest energy companies in the U.S., but it collapsed in 2001 after engaging in massive accounting fraud. Executives used off-the-books accounting to hide billions in debt and mislead investors. When the fraud was exposed, Enron’s stock plummeted from $90 to nearly zero, wiping out investors. The scandal led to new financial regulations, including the Sarbanes-Oxley Act.
How to Identify Ethical & Legal Risks
✅ Check for SEC filings – Look for investigations, lawsuits, or restated earnings in company reports.
✅ Watch for sudden executive resignations – CEOs leaving amid legal issues can be a red flag.
✅ Monitor whistleblower reports – Employee complaints or leaked documents often reveal unethical practices.
📖 Related Article: Penny Stocks – A Hard Lesson and the Path to Quality Investing
Key Takeaway
Companies involved in fraud, lawsuits, or regulatory investigations pose major risks to investors. Always research a company’s leadership, financial integrity, and legal history before investing to avoid catastrophic losses.
11. How to Research a Company’s Financial Health to Spot Warning Signs
Before investing in any company, it’s essential to analyze its financial health to ensure it has strong fundamentals and long-term stability. A company may appear successful on the surface, but if its financial statements show signs of weakness, it could be at risk of failure.
Key Financial Statements to Analyze
📊 Income Statement – Measures Profitability
- Look for consistent revenue and earnings growth over multiple years.
- Declining profits or shrinking margins can signal financial struggles.
📊 Balance Sheet – Measures Financial Stability
- A strong company has more assets than liabilities and manageable debt levels.
- Check the debt-to-equity ratio—a high ratio indicates excessive borrowing.
📊 Cash Flow Statement – Measures Liquidity & Cash Reserves
- Operating cash flow should be positive and growing.
- Companies that burn through cash without generating profits may struggle to survive.
Red Flags to Watch For
🚨 Declining Revenue & Earnings – A long-term downtrend may indicate a failing business.
🚨 High Debt Levels – If a company takes on too much debt without increasing profits, it may be unsustainable.
🚨 Negative Free Cash Flow – If a company consistently spends more cash than it brings in, it may struggle to fund operations.
📖 Related Article: Analyzing Financial Statements to Find Compounding Stocks
Key Takeaway
Understanding a company’s financial health is critical for long-term investors. Analyzing financial statements helps identify strong businesses while avoiding those at risk of failure. Always do thorough research before investing
12. Common Mistakes to Avoid – Protect Your Investments
Successful investing isn’t just about picking great stocks—it’s also about avoiding costly mistakes. Many investors fall into common traps that can lead to poor investment decisions and financial losses. Here are three critical mistakes to avoid when evaluating stocks.
1. Ignoring Financial Statements
🚨 Mistake: Relying on stock tips, media hype, or social media instead of analyzing financial statements.
📉 Why It’s a Problem: Without reviewing a company’s income statement, balance sheet, and cash flow statement, investors may overlook warning signs like declining revenue, high debt, or negative cash flow.
🔎 How to Avoid It: Always research a company’s profitability, debt levels, and cash flow trends before investing.
2. Assuming Past Success Guarantees Future Stability
🚨 Mistake: Believing that a once-successful company will always perform well.
📉 Why It’s a Problem: Many well-known companies, like Kodak and Blockbuster, were once market leaders but failed to adapt to industry changes.
🔎 How to Avoid It: Look at a company’s growth strategy, competitive positioning, and financial health, not just its history.
3. Investing in High-Dividend Stocks Without Checking Fundamentals
🚨 Mistake: Choosing stocks based solely on a high dividend yield without considering the company’s financial health.
📉 Why It’s a Problem: Some companies with unsustainable dividends may be at risk of dividend cuts or financial collapse.
🔎 How to Avoid It: Analyze the payout ratio, cash flow, and debt levels before investing in dividend stocks.
📖 Related Article: How to Build a Discounted Cash Flow (DCF) Model in Excel or Google Sheets
Key Takeaway
Avoiding these mistakes can protect your portfolio from unnecessary risks. Always do thorough research, evaluate financials, and focus on long-term fundamentals before making investment decisions.
13. Actionable Takeaways – How to Spot Troubled Companies Before It’s Too Late
Identifying a failing company before its stock collapses can save your portfolio from significant losses. While no single factor guarantees a company’s downfall, a combination of warning signs often signals trouble ahead. Here are five key areas investors should monitor to spot troubled companies early.
1. Watch for Declining Revenue & Profits
📉 Why It Matters: A consistent drop in revenue and profits over multiple quarters or years suggests that a company is losing market share, struggling with demand, or facing pricing pressure.
🔎 What to Look For: Review the income statement in quarterly and annual reports. If revenue and earnings are shrinking while competitors are growing, it’s a major red flag.
2. Avoid Heavily Indebted Companies
💰 Why It Matters: Excessive debt increases financial risk, especially if interest payments become unmanageable.
🔎 What to Look For: Check the debt-to-equity ratio and interest coverage ratio (EBIT/interest expense). A high debt load with declining revenue is a dangerous combination.
3. Check Cash Flow Health
💵 Why It Matters: Profits on paper don’t always mean a company has enough cash to sustain operations.
🔎 What to Look For: Review the cash flow statement to ensure operating cash flow is positive and growing. Companies with negative free cash flow may struggle to survive.
4. Monitor Insider Trading
👀 Why It Matters: Executives know their company’s true financial health better than anyone.
🔎 What to Look For: Frequent insider selling and no insider buying can signal that executives lack confidence in the company’s future.
5. Investigate Dividend Cuts
📉 Why It Matters: A dividend cut is often a sign that a company is struggling with cash flow or debt.
🔎 What to Look For: Check the payout ratio and free cash flow trends—if dividends are slashed, it may indicate deeper financial trouble.
Key Takeaway
A failing company rarely collapses overnight—the warning signs appear well in advance. By monitoring revenue trends, debt levels, cash flow, insider trading, and dividend stability, investors can make informed decisions and avoid investing in companies on the brink of failure
14. Conclusion: Importance of Spotting the Warning Signs a Company is Failing
As a long-term investor, recognizing the warning signs a company is failing can help you make better investment decisions. Whether it’s falling revenue, excessive debt, negative cash flow, or leadership instability, these red flags should not be ignored.
Before investing, always do your research, read financial statements, and identify potential risks. If a company exhibits multiple warning signs, it’s best to avoid it or consider selling your shares.
📖 Related Article: Free Stock Tools – Essential Stock Analysis Tools for Investors
Happy Investing!