At some point in their journey, every company will go through a crisis, or even more than one. However, it is the ability to overcome crises and obstacles that defines the companies that endure in the market from those that quickly wither. Therefore, it is 
important for every manager to differentiate a crisis from an isolated problem and have basic knowledge to deal with the disturbances.
It is important for the company to maintain metrics and comparative tables, as they may go through fluctuations related to seasonality issues, macroeconomic impacts, and eventual actions by competitors, which affect both revenue and results. These parameters help to know if the business is doing well or if there are problems.
Some factors indicate whether the company is in crisis or not, but they must be applied on a case-by-case basis, with great attention. After all, each company has its particularities.
In order to help entrepreneurs and managers identify if the business is in crisis, the specialist Flávio Ítavo created two lists with medium and short-term indicators. From his point of view, if the company is classified in any of the lines below, it is in crisis. Small companies, or those in the early stages or with 
a very brief life cycle, should replace “year” with “semester” or “quarter” in each of the following indicators.
The company is in crisis if in the medium term it presents:
• ROI (Return On Investment) below the base interest rate of the economy where the company is located for two consecutive years;
• Reduction in its net revenue for three consecutive years;
• Reduction in ROI and net revenue for two consecutive years;
• Growth of gross profit below the growth of GDP for three consecutive years;
• ROI or percentage of net profit below those obtained by competitors of the company in a “consistent” manner. The company is in crisis if in the short term it presents:
• Difficulty in leveraging daily operations and there is no possibility of changing the situation through leverage from banks, loans, or equivalents;
• If the cost of leverage in the medium term is greater than the expected result for the period;
• If the business outlook does not encourage the entry of new resources, whether from banks or through alliances or new investors.
Using parameters is important as they indicate whether there is a crisis, in which phase it is, and the right time to seek help from specialists. Knowing the right moment for making accurate decisions makes all the difference and is one of the fundamental success factors in rescuing a company.
Source: Flávio Ítavo and Clozel Comunicação