The article compares two models to predict corporate failure: one that groups failed firms together and one that categorizes them based on different levels of financial difficulties. The study found that the model grouping all failed firms together had fewer errors in predicting corporate failure compared to the model that classified them into different levels of financial distress. This suggests that slightly-distressed firms are similar to those on the verge of bankruptcy, indicating a high risk of financial failure. Investors and debtors should be cautious when dealing with such companies to avoid potential losses.