Balance Sheets Flag Risky Companies Amid Virus Outbreak

Investors used to focusing on earnings and top-line revenue growth are back to studying balance sheets, trying to pick which companies will outlast the coronavirus outbreak or end up battered and in bankruptcy court.

Analysts and corporate executives alike are struggling to understand what the new economic normal will be, how long business disruptions will last, and how consumer behavior might shift as a result of the pandemic. That makes balance sheets a critical and timely snapshot of corporate finances, detailing assets like cash on hand and goodwill and offsetting expenses like rent, credit lines and pension obligations.

“We’ve seen ...