Lasa Supergenerics Limited — financial distress indicators

Interest coverage (EBIT / interest) is -34.66×.

When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.

Current ratio is 0.62 (current assets cover 62% of near-term obligations).

Cash-flow insolvency test: inability to pay debts as they fall due is the trigger for both U.S. involuntary petitions and Indian IBC default.

Net income negative in 3 of 3 fiscal years.

Persistent losses erode equity and the capacity to absorb shocks.

Revenue changed -82% year over year.

A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.

Operating cash flow negative in 2 of the last 3 years.

A business that cannot fund itself from operations depends on external capital to survive.

O-score 2.08 → model probability 89%.

Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.

Short-term debt is 14.0× cash on hand.

Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.

Operating margin fell from -8% to -53% in two years.

Sharp margin compression signals loss of pricing power or cost control.