Euler Hermes Global Insolvency Index: Insolvencies to rise in 4 out of 5 countries in 2020

Global bankruptcies are still on the rise, implying higher export risks: this is the conclusion of the latest Global Insolvency Report by Euler Hermes, which covers 44 countries and 87% of global GDP and provides the last update of its Global Insolvency Index. Business insolvencies increased by +9% in 2019, mainly due to a prolonged surge in China (+20%) and, to a lesser extent, a trend reversal in Western Europe (+2%) and North America (+3%).

Which countries are best for SMEs?

Our new “SMЕ Business Climate Index” (SMEB) assesses the business environment for SMEs in 13 selected economies. It is based on six components that SMEs have identified as having a crucial impact on their businesses: red tape, tax policy, labor market flexibility, financing, export opportunities and competition

Three indicators can reveal the risk of insolvency for European SMEs up to four years in advance

Euler Hermes’ new study on European SMEs and midcaps identifies three indicators that can provide warning signs before a bankruptcy: profitability, capitalization and the interest coverage ratio. Most insolvencies do not come as a surprise. Euler Hermes’ research also shows companies experience three phases of distress before facing an acute insolvency risk: a strategy crisis, a profitability crisis and then a solvency crisis.

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