TechPrecision Corporation — financial distress indicators
Financial-health summary
TechPrecision Corporation's reported numbers place it in the 'Weak' financial-health band (distress score 55/100). The main indicators are operating profit does not cover interest, losses in each of the last 3 years and very high leverage. Independently, the Ohlson accounting model puts its 1-year failure probability at 95% and the market-implied (Merton) default probability is 0.0%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is -2.20×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Total debt is 6.4× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 2.97 → model probability 95%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.98.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
📰 Recent news scan
- TechPrecision (TPCS) Q1 2027 Earnings Call TranscriptYahoo Finance · 2026-08-20
- Techprecision Corp (TPCS) (Q1 2027) Earnings Call Highlights: Revenue Surges 23% on Strong ...Yahoo Finance · 2026-08-14
- TechPrecision Corporation Schedules Conference Call to Report Fiscal 2027 First Quarter Financial ResultsYahoo Finance · 2026-08-06
- Techprecision Corp (TPCS) Q4 2026 Earnings Call Highlights: Navigating Challenges with ...Yahoo Finance · 2026-06-23
- TechPrecision Corporation Reports Fiscal Year 2026 Fourth Quarter and Year End Financial ResultsYahoo Finance · 2026-06-22
- TechPrecision Corporation Schedules Conference Call to Report Fiscal 2026 Fourth Quarter and Year End Financial ResultsYahoo Finance · 2026-06-22
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do TechPrecision Corporation's financial-health indicators show?
As of 2026-10-08, TechPrecision Corporation's public financial data places it in the 'Weak' band with a distress score of 55/100, driven by operating profit does not cover interest, losses in each of the last 3 years and very high leverage. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is TechPrecision Corporation's financial distress score?
55/100 ('Weak'). Ohlson O-score 2.97 (model 1-year failure probability 95%). Merton distance-to-default 4.69 σ (model default probability 0.0%).
What works in TechPrecision Corporation's favour?
Operating cash flow is positive over the latest 12 months.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.