Business leaders in the Asia-Pacific region are to watch out for four warning signs of distress to build stronger, more resilient businesses and prevent avoidable insolvencies.
In a new analysis by consulting firm AlixPartners, APAC business leaders are being urged to look into decreasing access to quality capital, mismatch between EBITDA and cash, missed milestones and targets, and senior management churn.
The data, which covers macroeconomic conditions, financial datasets, and business trends, reveal that company insolvencies rose by 39% in Asia in 2025, affecting almost every financial centre in the region including Hong Kong and Singapore.
Conditions remain uncertain for many businesses in 2026, according to AlixPartners.
The consulting firm stresses that the four indicators outlined in the report should be prompts for action, not observations from the sidelines.
Warning sign #1: Decreasing access to quality capital – As many Asian businesses remain privately or family-owned, there is often less transparency around their sources of capital and related debt-financing risks, which can be an early indicator of corporate distress. As a result, stakeholders need to work harder to evaluate risks, particularly when non-bank financing is involved.
Warning sign #2: Mismatch between EBITDA and cash – With EBITDA excluding the costs of financing, taxes, and asset aging, company stakeholders should carefully review each business’s debt-servicing capabilities.
Warning sign #3: Missed milestones and targets – As past high-profile corporate failures demonstrate, missed targets, milestones, and shareholder commitments are a key warning sign for company stakeholders to monitor. While operational setbacks can be concerning, the most significant warning signals typically arise when companies fail to meet commitments to shareholders, lenders, or investors.
Warning sign #4: Senior management churn – A stable management team with a clear, cohesive strategy is a positive sign for any business, whereas senior management turnover is often an early sign of company distress. The process of replacing departing leaders is highly disruptive to the normal functioning of business and can set a company’s progress back by as much as 12 months.
AlixPartners recommends that business leaders take control early before their options narrow, highlighting that early intervention is the single most effective tool for preserving value, protecting stakeholders, and restoring businesses to sustainable growth.
