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Interserve: The warning signs were ignored

Hindsight is a wonderful thing but signs of problems at Interserve could have been easily identified years before its share price collapsed.
Interserve: The warning signs were ignored

The high-profile demise of construction and support services company Carillion last year contained many valuable lessons for investors. Despite several red flags in its financial statements for many years, investors largely ignored them until the company warned that it was in trouble.

The key takeaways from Carillion were that construction and outsourcing businesses are very opaque and that outside investors have a virtually impossible task of really understanding what is going on with them – until something bad happens.

Yet, had investors taken the time to study Carillion’s annual reports they would have found many grounds for concern long before its share price collapse. In particular:

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