Vision Marine Technologies Inc. — financial distress indicators
Financial-health summary
Vision Marine Technologies Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 82/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 99% and the market-implied (Merton) default probability is 91.7%. 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 -4.42×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -1.39 σ → PD 92%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Debt is 60% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -100% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 4.31 → model probability 99%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +30568% in a year.
Survival financing: repeated equity raises at depressed prices.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+396% YoY).
📰 Recent news scan
- (VMAR) Movement Within Algorithmic Entry Frameworks - Stock Traders DailyGoogle News · 2026-10-08
- Vision Marine Technologies Company Profile & Introduction - MoomooGoogle News · 2026-10-07
- $VMAR stock is up 28% today. Here's what we see in our data. - Quiver QuantitativeGoogle News · 2026-08-26
- Vision Marine Technologies Announces Reverse Stock Split - Yahoo FinanceGoogle News · 2026-08-24
- VMAR Stock Jumps As Vision Marine Cuts Costs And Grows Sales - StocksToTradeGoogle News · 2026-07-14
- Vision Marine Technologies Announces Reverse Stock Split - PR NewswireGoogle News · 2026-06-15
⚖️ 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 Vision Marine Technologies Inc.'s financial-health indicators show?
As of 2026-10-08, Vision Marine Technologies Inc.'s public financial data places it in the 'Very weak' band with a distress score of 82/100, driven by operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. 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 Vision Marine Technologies Inc.'s financial distress score?
82/100 ('Very weak'). Ohlson O-score 4.31 (model 1-year failure probability 99%). Merton distance-to-default -1.39 σ (model default probability 91.7%).
What works in Vision Marine Technologies Inc.'s favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+396% YoY).
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.
Other Consumer Discretionary companies with distress indicators
- AIIO (AIIO)Very weak 100/100
- ECARX Holdings Inc. (ECX)Very weak 100/100
- Polestar Automotive Holding UK PLC (PSNY)Very weak 100/100
- Polestar Automotive Holding UK PLC (PSNYW)Very weak 100/100
- Reborn Coffee, Inc. (REBN)Very weak 100/100
- Sports Entertainment Gaming Global Corporation (SEGG)Very weak 100/100
All Consumer Discretionary companies with distress indicators →
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.