patterns / liquidity_squeeze

credit thesis

Liquidity squeeze

current assets have fallen below short-term creditors and the ratio is still worsening — the classic run-up to a cash crisis (1.7× the failure rate)

the signature — what the register must show
staff ≥5
current assets below creditors due within one year
the current ratio worse than the prior year

Why it matters

Working capital has gone negative AND is still deteriorating — the company owes more within the year than it can realise, and the gap is widening. This is the mechanical run-up to a cash crisis; the backtest puts it at 1.7× the failure rate.

The play

An urgent working-capital / rescue-finance conversation: invoice finance, an RCF or restructuring, while there is still a balance sheet to lend against.

How it's kept honest

The badge is recomputed nightly across the whole index, and re-evaluated live the moment a company files — so a match is always a statement about the current register, not a stale list. Like every signal on the radar: a prompt to look closer, never a verdict.