Zombie Company

A “Zombie Company” refers to a business that is unable to cover its debt servicing costs from current Revenues, yet continues to operate due to low Interest Rates or continued borrowing. These companies often rely on external funding to survive rather than generating profits. Examples include many firms in industries such as retail or energy that struggle to maintain profitability while burdened by significant debt. Notable cases include companies like J.C. Penney and Chesapeake Energy, which have faced financial difficulties but continued operations despite negative Cash Flows.