Engineering and Technology | Open Access |

Operational Red Flags in U.S. Corporations (2020–2025): Financial Distress Indicators and Strategic Responses

Shaurya Shounik , MS in Finance, Brandeis University Independent Researcher, USA

Abstract

Following the COVID-19 pandemic, U.S. corporations encountered unprecedented financial and operational challenges. This research examines the early warning signals of financial distress for firms from a period of 2020 to 2025 and their strategic responses to such challenges. We employed a mixed-method approach, analyzing company success indicators while incorporating qualitative insights from academic literature and industry sources. Critical findings indicate that in the post-COVID economy, particular operational red flags such as declining revenues, insufficient liquidity, escalating debt burdens, and operational inefficiencies frequently led to significant financial difficulties for enterprises. The research evaluates the effectiveness of the strategic measures employed by firms, including significant cost reductions, restructuring, adaptive pivots, and stakeholder support initiatives. In conclusion, the research indicates that a company's resilience in the post-pandemic years (2020–2025) was contingent upon the early identification of warning indicators and timely strategic actions. Scholars, professionals, and politicians may utilize this information to enhance preparedness for future economic disruptions and establish early warning systems.

Keywords

Corporate Strategy, Financial Distress, Crisis Management, Business Resilience, Cost Retrenchment, Debt Restructuring

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Shounik, S. . (2025). Operational Red Flags in U.S. Corporations (2020–2025): Financial Distress Indicators and Strategic Responses. The American Journal of Engineering and Technology, 7(03), 265–274. Retrieved from https://www.theamericanjournals.com/index.php/tajet/article/view/6534