Bankruptcy Filings Drag Down ARM Index

The Kaulkin Ginsberg Index (KGI), the leading indicator of economic conditions affecting the accounts receivable management (ARM) industry, fell in January, weighed down by the historic rise in bankruptcy statistics that took place during the fourth quarter of 2005. More bankruptcy filings were made during that quarter than any other quarter on record. The Index fell 2.8% to 1222.8.

“The KGI would have continued its upward movement had it not been for the bankruptcy statistics that have just been made public,” said Paul Legrady, Director of Kaulkin Ginsberg’s Research Group. “These numbers suggest that it will be more difficult for creditors and collectors to convert receivables in to cash, at least on certain accounts.”

A closer look at the recent history of bankruptcy filings in the U.S. shows how the KGI was weighed down consistently by this variable in 2005. Downward pressure is exerted on the Index as the number of bankruptcy filings increase.

The KGI decrease in January was limited by four of the Index?s seven macroeconomic variables that had a positive influence on the Index. Results were as follows:

The KGI is a product of Kaulkin Ginsberg’s Research Group, which provides industry-specific publications and custom research services to the ARM industry. For more information about the Kaulkin Ginsberg Index, see www.kaulkin.com/research/kgi.cfm or call Paul Legrady, Director of Kaulkin Ginsberg’s Research Group, at 301-907-0840 ext. 104.