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中人理CHRM INFO:Global consulting firm AlixPartners has today published new analysis identifying four warning signs of distress that business leaders should monitor and act on to build stronger, more resilient businesses and prevent avoidable insolvencies.
The analysis draws on APAC data covering macroeconomic conditions, financial datasets, and business trends, combined with AlixPartners’ extensive experience in advising companies under significant financial pressure.
Recognizing these warning signs early can provide stakeholders with valuable time to take corrective action, preserve value, and return companies to growth.
- Decreasing access to quality capital
- Mismatch between EBITDA and cash
- Missed milestones and targets
- Senior management churn
Conditions remain uncertain as insolvencies increase
Following persistently high inflation in the aftermath of the COVID-19 pandemic, along with other challenges, businesses in Asia are under strain.
Company insolvencies rose by 39% in Asia in 2025, a trend that impacted almost every financial centre in the region. This includes powerhouses Hong Kong and Singapore, with each recording an increase of 33%[1]. Conditions remain uncertain for many businesses in 2026.
Business failures are not caused by a single event. More often, they result from warning signs that were visible but not addressed early enough.
The four indicators outlined in this report—declining access to quality capital, a mismatch between EBITDA and cash, missed milestones and targets, and senior management churn— should be prompts for action, not observations from the sidelines.
Warning sign #1: Decreasing access to quality capital
The APAC business landscape is dominated by millions of small, family-owned businesses, with micro, small, and medium-sized enterprises (MSMEs) making up an estimated 97% of all companies in the region.
As many Asian businesses remain privately or family-owned, there is often less transparency around their sources of capital and related debt-financing risks, which can be an early indicator of corporate distress. As a result, stakeholders need to work harder to evaluate risks, particularly when non-bank financing is involved.
Patrick Bance, Partner & Managing Director, Singapore, AlixPartners, comments:
“When companies start tapping higher cost debt providers or less sophisticated retail investors for additional funding, it can be an indication that a company’s relationship with banks or shareholders is no longer willing to commit additional capital.”
Warning sign #2: Mismatch between EBITDA and cash
Nearly one-fifth of total Asian corporate debt is owed by firms with low interest coverage ratios, suggesting pressure on many companies where EBITDA alone does not tell the full story.
With EBITDA excluding the costs of financing, taxes, and asset aging, company stakeholders should carefully review each business’s debt-servicing capabilities.
Matt Hinds, Partner & Managing Director, Singapore, AlixPartners, comments:
“A persistent mismatch between EBITDA and cash generation is the surest warning sign. As an early client said to me, ‘It’s never too early to start worrying about cash.’”
Warning sign #3: Missed milestones and targets
As past high-profile corporate failures demonstrate, missed targets, milestones, and shareholder commitments are a key warning sign for company stakeholders to monitor.
While operational setbacks can be concerning, the most significant warning signals typically arise when companies fail to meet commitments to shareholders, lenders, or investors.
Patrick Bance, Partner & Managing Director, Singapore, AlixPartners, comments:
“Delayed statutory filings and delayed or downsized fundraising efforts can be an early warning sign of potential disagreements about asset valuation, business performance, forecast cashflows, and investor confidence in the company.”
Warning sign #4: Senior management churn
A stable management team with a clear, cohesive strategy is a positive sign for any business, whereas senior management turnover is often an early sign of company distress.
The process of replacing departing leaders is highly disruptive to the normal functioning of business and can set a company’s progress back by as much as 12 months.
Matt Hinds, Partner & Managing Director, Singapore, AlixPartners, comments:
“If you are seeing increasingly high levels of management churn, the thing you are going to worry about is that they are not getting rid of those who are responsible for poor performance. It is the good ones who will go somewhere else. And management churn, in itself, is disruptive.”
In markets dominated by family businesses, clear succession planning can be a material risk factor. The concentration of strategic decision-making, institutional knowledge and key relationships in the hands of a single patriarch or matriarch means that an unplanned or contested transition can destabilize an otherwise healthy business rapidly.
Una Ge, Partner & Managing Director, Greater China, AlixPartners, said:
“A lot of Chinese companies are family-run, where the business is often seen as part of the family’s legacy, so the instinct to keep it in family hands is very strong. The issue is whether the right succession planning is in place and being executed. In many cases, formal succession planning remains limited.”
Take control early before options narrow
When signs of distress emerge, time becomes a critical asset regardless of jurisdiction. Stakeholders who act early have access to a broader set of value-preserving interventions, while those who delay often find themselves relying on increasingly disruptive measures.
Early intervention is the single most effective tool for preserving value, protecting stakeholders, and restoring businesses to sustainable growth. Organisations that emerge strongest are typically those that recognise the signals early, confront difficult realities quickly, and act decisively before circumstances force their hand.
