Zombie Company

"A zombie company is a business that generates cash, but is so indebted that it can only pay off its fixed costs and interests, and not the debt itself.

[...] we’re seeing fragile businesses accumulating more and more debt [...]. Even though these companies are technically still trading, it’s not enough to cover their debt once it has to be paid back and in reality, they’re already insolvent. 

Identifying a potential zombie takes expert risk assessment, but there are a few simple warning signs to look out for. Beware if:

• The company can’t cover its interest costs twice over with the last year’s earnings before taxes

• Its one-year and average three-year sales growth is less than 3%

• Its vision relies on outdated products or distribution channels".

Source: https://www.allianz-trade.com/en_global/news-insights/business-tips-and-trade-advice/zombie-companies--what-are-they-and-how-can-you-mitigate-your-ri.html