From the Department of Useless Studies

According to Monday’s Times, the clever folks at EY have studied 20 years of company performance history. The detailed studies are available on the EY site.

Apparently a company that issues three or more profit warnings in a year has a 1 in 10 chance of going bust in a year. Or a 90% chance of not going bust – by my maths anyway.

They go on …

A company issuing those same three profit warnings has a 25% chance of losing its CEO and a 20% chance of losing its FD. Or a 75% and 80% chance of not losing them.

18% of companies who warn on profits go on to issue at least two or more warnings within a year. 88% don’t. You get the gist.

This could perhaps be summed up as

Trouble comes in threes. Except when it doesn’t. Which is more often than not.

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