Take a look at the below numbers. Good, Bad or ugly seeing years 1-3 ?  On face of it, will fall in last two categories on first glance.

There were lot of factors playing at same time in it-

• Extraordinary income and expenses.
• Fluctuating sales.
• High borrowing vs sales.

But also what this company continued doing was investing in

• Fixed Assets
• People ( Look at employee cost even though sales had fallen).

Here it was important to understand the non-financial metrices which were in favour of company-

• World class manufacturing facility.
• Product required multiple approvals from regulatory bodies as well as business associates.
• Business associates (customers) were leading industry players and had offtake contracts and long term past association.
• Problems which led to the bleeding in P & L were clearly identifiable and corrective processes were in place.
• Ability of the promoters to pump in money if required although was yet to be demonstrated.
• Happy, dedicated and long vintage employees.

Below is what happened YOY subsequently  in short –

So even though the operating numbers didn’t look good, it was a good credit if you give benefit of above factors the foundation was strong to come out of challenge which it was facing.