[Announcement of predicted bankruptcy occurrence rankings by industry from 2024 onwards] Agriculture ranks first, with 1 in 84 companies at risk of going bankrupt, followed by textile and clothing wholesale, with 1 in 92 companies at risk of going bankrupt.
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Press release: December 20, 2023
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[Announcement of predicted bankruptcy occurrence rankings by industry from 2024 onwards] Agriculture ranks first, with 1 in 84 companies at risk of going bankrupt, followed by textile and clothing wholesale, with 1 in 92 companies at risk of going bankrupt.
*～Analyzes 13,496 companies and 244,689 online information etc. and extracts companies requiring vigilance～*
Ranking of industries with high probability of bankruptcy
* ・Bankruptcies occur in industries that are highly dependent on foreign countries and are susceptible to the effects of the weak yen and rising fuel costs*
* ・Increased risk of bankruptcy due to lack of human resources and declining profits in the construction and transportation industries facing the “2024 problem”*
* ・Bankruptcies due to scandals and compliance violations lead to a decline in trust in the entire industry*
Alarm Box Co., Ltd. (Headquarters: Shinjuku-ku, Tokyo, Representative Director: Hirokazu Takeda, hereinafter referred to as the “Company”), which provides AI credit management services, has announced that We have analyzed and extracted “companies requiring vigilance” that are at risk of going bankrupt within a year from the collected 13,496 companies and 244,689 online information, etc., and have predicted the “top 10 industries with high risk of bankruptcy”. To do.
* ◆Ranking of industries with high probability of bankruptcy* Ranking of industries with high probability of bankruptcy
* ◆Investigation background*
In 2023, production costs rose for many domestic companies due to a rise in import costs due to the weak yen. The resulting rise in prices has had a major impact not only on consumers but also on businesses, and many businesses are still in dire straits. In addition, due to the work style reform related laws that will start to be applied in April 2024, there is concern about the “2024 problem” in industries such as logistics, transportation, construction, and medical care, which will be affected by labor shortages and decreased sales.
In this situation of uncertain future, new applications for business support measures such as business closure support funds and benefits in response to the novel coronavirus infection have ended, and repayments of zero-zero loans have begun in earnest. As a result, an increasing number of companies are at increased risk of bankruptcy, but for many companies with weak financial foundations, uncollected payments caused by the bankruptcy of a business partner have a significant impact on their cash flow. In order to avoid these management risks, companies are required to constantly understand industry trends and bankruptcy risks of their business partners. As part of our efforts to prevent chain bankruptcies among companies, we have been using our AI credit management cloud service “Alarm Box” to collect and analyze information that appears to be the reasons for and signs of bankruptcy, and provide it to service users.
Based on the above, we aggregated “companies in need of vigilance that are at risk of going bankrupt within a year” by industry and analyzed their contents, thereby demonstrating the importance of timely information collection and utilization in credit management of business partners. In order to raise awareness of the law, we have decided to conduct and publish this study.
* ◆Main survey results*
In this survey, we found that there was a lot of bankruptcy-related information in industries where production costs increased due to the weak yen and rising labor costs. Agriculture has been strongly affected by the weak yen due to dependence on feed imports and rising fuel costs due to the weak yen, and the apparel industry has been strongly affected by the weak yen due to dependence on overseas production bases, resulting in several cases of companies going bankrupt. In the construction and transportation industries, there have been cases where rising labor costs and increased outsourcing costs due to a shortage of human resources are putting pressure on profits, and there are signs that the shortage of human resources is getting serious ahead of the 2024 problem. .
Additionally, there have been several cases where companies have gone bankrupt after financial troubles with customers or scandals by their managers have become a hot topic, and the impact of a decline in trust due to compliance violations is becoming greater.
* ◆Survey results details*
* 1st place: Agriculture: 1 in 84 companies is at risk of going bankrupt* *Main businesses: Cultivated agriculture, livestock farming, horticulture services, etc.*
Agriculture has ranked number one in previous surveys several times, but this time it has become an industry with a high risk of
bankruptcy, with bankruptcies and payment delays occurring even among long-established companies and start-up companies. It is thought that companies whose cash flow has worsened due to the impact of the decline in commercial demand due to the coronavirus pandemic and the effects of soaring feed prices are running out of steam and going bankrupt.
Although the decline in demand due to the coronavirus pandemic appears to have stabilized, industry issues such as high dependence on foreign countries for feed grains, increased production costs due to soaring fuel costs, and overproduction still remain, and continued vigilance is required.
* 2nd place Textile/clothing wholesale industry: 1 in 92 companies is at risk of going bankrupt*
*Main business: Import of raw materials such as fibers and dyeing materials, wholesaling of ready-made clothing, etc.*
The textile and clothing wholesale industry, which is the trading company sector of the apparel industry, moved up from 8th place last time to 2nd place. In addition to bankruptcies and business
suspensions, several companies were reported to have falsified their financial statements. It is believed that companies with deteriorating cash flow have resorted to falsifying their financial statements in order to raise new funds due to a decline in demand for clothing due to the prolonged coronavirus pandemic and a decline in profits due to intensified competition with overseas companies. When doing business with a company that is not doing well, it is important to manage credit by taking into account information such as reputation in addition to financial statements.
* 3rd place Construction business by occupation (excluding equipment construction business): 1 in 98 companies is at risk of going bankrupt*
*Main business: Scaffolding work, interior work, painting work, steel frame work, etc.*
Occupational construction, which ranked 7th in the previous survey, moved to 3rd place. Bankruptcies were occurring among businesses that mainly performed interior work and painting work as subcontractors. Recently, due to the weak yen and the Ukraine issue, the cost of fuel and the purchase of construction materials have skyrocketed, and companies that are unable to negotiate prices with main contractors are facing a decline in profitability. In addition, the industry is experiencing a labor shortage, which is causing a decline in profits due to outsourcing costs and a decrease in order volume. Overtime work regulations under the Work Style Reform Act will begin to apply from April 2024. There is a risk that the labor shortage will worsen and the risk of bankruptcy will increase.
* 4th place: Electrical industry: 1 in 104 companies is at risk of going bankrupt*
*Main businesses: power plants, electricity retail, etc.*
The electrical industry, which has always been ranked in this survey that started in June 2022, came in 4th place this time as well. Due to electricity liberalization in 2016, many electricity retail companies called Shindenryoku (new power companies) that do not own power plants have emerged, and although some companies were established with investment from major companies, the cost of fuels such as crude oil and liquefied natural gas has increased. As a result of the soaring prices, the purchase price of electricity soars and unprofitable businesses are forced to go bankrupt.In the electricity industry, soaring fuel costs due to the weak yen are also a factor increasing the risk of bankruptcy.
* 5th place: Textile industry: 1 in 107 companies is at risk of going bankrupt* *Main businesses: Silk reeling, spinning, textile, etc.*
The textile industry ranked first in the previous survey, but this time it ranked fifth. While profits were declining due to the coronavirus pandemic, the weak yen caused import costs and
manufacturing costs at overseas factories to rise, leading to bankruptcies among companies that had reached their cash flow limit. Additionally, amidst the harsh business conditions in the apparel industry as a whole, some companies have experienced chain
bankruptcies due to the bankruptcy of affiliated companies such as retailers and wholesalers. There are cases of companies that have gone bankrupt several months after the information about payment delays occurred, so you need to be careful about the payment information of business partners and the bankruptcy of affiliated companies. * 6th place: General construction business: 1 in 108 companies is at risk of going bankrupt*
*Main businesses: civil engineering work, architectural work, architectural renovation work, etc.*
We are aware that the risk of bankruptcy is increasing due to worsening cash flow, payment delays, and communication difficulties due to the impact of the “wood shock” of soaring lumber prices that began around March 2021 and the soaring prices of related materials due to the weak yen. There was a lot of information that suggested this. Additionally, there are some companies that have gone bankrupt after scandals such as accounting fraud and involvement with anti-social forces were reported, and credit checks from a compliance perspective will be important in the future.
* 7th place Transportation industry: 1 in 119 companies may go bankrupt* *Main businesses: road freight transportation, water transportation, air transportation, warehousing, etc.*
The transportation industry ranked 7th, with the same number as the laundry, barber, beauty, and bath industry. The transportation industry has long been viewed as a concern due to soaring fuel and labor costs, and small and medium-sized businesses that were unable to pass on the costs were experiencing bankruptcies. In addition, there was information suggesting deterioration in cash flow, such as unpaid wages in the transportation industry and rent arrears in the warehousing industry. In the transportation industry, the 2024 work style reform law will limit annual overtime hours for car driving jobs to 960 hours in 2024, and the “2024 problem” is imminent, which will further accelerate the driver shortage. As a result, a decrease in orders and an increase in outsourcing costs are expected due to labor shortages, and the risk of bankruptcy for companies in the
transportation industry has increased significantly compared to last year.
* 7th place: Laundry, barber, beauty, and bath industry: 1 in 119 companies is at risk of going bankrupt*
*Main businesses: salon management, cleaning shops, public baths, etc.* The laundry, barber, beauty, and bath industry ranked 7th, with the same number as the transportation industry. Competition among beauty salons has intensified in recent years, and there have been reports of bankruptcies and service suspensions. Beauty salons and hair removal salons often require high fees to be paid in advance or taken out on loan when signing a contract, and there have been cases of financial troubles caused by sudden suspension of services. It is important to constantly monitor information online that may be a sign of
bankruptcy, such as posts regarding suspension of new member acceptance or refund troubles, and use this to avoid trouble. * 9th place: Printing and related industries: 1 in 131 companies is at risk of going bankrupt*
*Main businesses: printing, newspaper, publishing, etc.*
This industry includes printing and publishing industries, as well as companies that support them, but in recent years demand for paper media has declined and the market size has shrunk. In this survey, among small and medium-sized enterprises whose business foundations were not solid, bankruptcies occurred among companies that specialized in a specific industry. If your business partners are concentrated within the same group or in a certain industry, you will be greatly influenced by your business partners, so collecting information on key customers of your business partners will help reduce the risk of non-collection. connect.
* 10th place Financial products trading industry, futures trading industry: 1 in 132 companies may go bankrupt*
*Main businesses: securities companies, investment companies, etc.* Bankruptcies were occurring in companies related to investment and loans. Additionally, some companies had alarming information such as lawsuits or suspicions of fraud at related companies. Securities companies and investment companies often have affiliated companies, so it is important to manage credit correctly by collecting information not only on companies with which they have direct transactions, but also on their subsidiaries and the corporations that represent them. * ◆Consideration*
The six industries that were ranked in the previous survey also ranked in the top 10 this time. The risk of bankruptcy remains high for these industries as their cash flow, which has worsened due to the coronavirus pandemic, has worsened further due to the effects of high prices and labor shortages.
Corona has been moved to a Class 5 infectious disease, and society is accelerating its move away from the coronavirus. On the other hand, companies that have incurred excessive debt due to zero-zero loans are finding it difficult to raise new funds, and with the repayments of zero-zero loans in full swing and the impact of the “2024 problem,” it is expected that bankruptcies will increase. It is expected. In such unstable market conditions, it is important for companies to maintain continuous credit management of their business partners in order to stabilize their business operations.
Please note that some of the companies in the industries ranked high in this survey have good financial conditions and corporate
structures, so it is important to keep track of trends and bankruptcy risks over time in order to make appropriate decisions for each company. We recommend that you prepare a credit management system and mechanism that allows you to easily understand the transaction before trading.
* ◆Survey overview*
Survey period: December 1, 2022 to November 30, 2023
Target companies: 13,496 companies monitored by alarm boxes
Target data: 244,689 alarm information distributed by alarm box * ◆About the alarm box*
The AI credit management service “Alarm Box” is a cloud service that uses AI technology to collect and analyze information posted on the websites of companies and local governments, as well as information posted on the Internet such as SNS and word of mouth. You can make credit decisions for new transactions, continue credit management for existing customers, and even guarantee sales receivables all at once. Since we provide information on the Internet that is difficult to collect and judge after diagnosing its impact on credit, we can easily and inexpensively introduce highly accurate credit management that utilizes information on the Internet. This significantly reduces the workload associated with gathering information on business partners, and allows you to quickly respond to risks by simply registering business partners from your smartphone or PC.
* ◆Company profile*
Company name: Alarm Box Co., Ltd.
Representative: Hirokazu Takeda, Representative Director and President Location: 3-22 Ichigayahonmuracho, Shinjuku-ku, Tokyo
Established: June 2016
Capital: 336 million yen
Corporate website: https://alarmbox.co.jp
Service site: https://alarmbox.jp
Alarm Box Co., Ltd.
Our company is a venture company that develops and provides the AI credit management cloud service “Alarm Box.”
We provide a service that uses AI to make corporate research and credit management, which has been considered difficult and
time-consuming and expensive, easy and inexpensive to start, and is currently being used by more than 5,000 companies.
“Alarm Box” is a cloud service that uses AI technology to collect and analyze information posted on the websites of companies and local governments, as well as information posted on the Internet such as SNS and word of mouth. Decision making, ongoing credit management of existing business partners, and even guaranteeing receivables can be done all at once.