Investing from a certain company or firm is one of the risks done by the investors but before engaging with the institution precise measurement for the profitability, earnings per share, equity valuation, market value, Okun laws, and etc were done.
Though this measure was done by the investors, the risk is still enveloped in investment. Bankruptcy of institution is still not measurable because forecasting of profits and earnings for future is still imaginary. Though there is a formula for forecasting or trends for the future earnings, 100% efficiency are still unmet. Meaning if bankruptcy was declared investors are the losers of the battle field and they are stamps and misery is not enough to overcome their failure.
Generally success and failure of the firm or company depends on the tactics or strategy of the CEO however the CEO can also manipulate everything. They can make a good balance sheet for presentation but the realities are behind the actual settings. Investors have to be more observant and be keen on the balancing the financial statements. Good accountant and econometrician will guide investors in the nice track of the battle of business.
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