As companies struggled financially during 2021, firms discussed the possibility of being unable to operate as a *‘going concern’. An analysis of GlobalData’s Company Filing Analytics database found that the number of companies that discussed ‘going concern’ and ‘doubt’ remains high at nearly 12,000, despite witnessing a slight decline of 9% in 2021 over 2020. However, the leading data and analytics company notes that, despite this slight decrease, there has been a consistent rise since 2016, with sentiment in 2021 being only 4% higher than in 2020.

Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, comments: “The slow rise in sentiment in 2021, coupled with a decline in the number of companies discussing ‘going concern’, could point to companies being more optimistic about their balance sheets. However, with nearly 12,000 companies still discussing ‘going concern’, this indicates that concerns remain despite the financial stimulus provided by governments globally. It also, unsurprisingly, highlights the financial impact that lockdowns had on many companies.”

The number of companies discussing ‘going concern’ and ‘doubt’ in 2021 remained below pre-pandemic levels compared to 2019; however, it is still significantly higher compared to 2016, 2017 and 2018. According to GlobalData’s Company Filing Analytics database, more companies based in the Asia-Pacific region discussed ‘going concern’ issues compared to companies based in the US.

Pereira adds: “On a positive note, fewer companies discussing ‘going concern’ discussed ‘loss’, ‘liabilities’, and related keywords in 2021 compared to 2020. Yet, uncertainty levels in 2021 amid the Omicron variant also appear to be high, with more ‘going concern’ firms mentioning ‘uncertainty’ and related keywords.”

*‘Going concern’ is a stage when a company has just the right amount of funds to continue operating until proven otherwise