The number of publicly traded companies receiving "going concern" warnings from their auditors is starting to spike, another sign of the deepening recession in the U.S. Unfortunately these warnings have come a little too late and are useless in helping investors avoid losses as the damage to equity prices are nearly total for the companies involved.

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When a company is audited, the auditors are required to examine whether the company has an ability to continue as a going concern, or to put it in layman's terms: if the company's cash flow is negative, it can't pay its bills and no one will lend it money any longer. (To find out how a company spends its money and whether there will be any left over for investors, see Analyze Cash Flow The Easy Way.)

American Axle (NYSE:AXL) had a going concern warning in its filing last week. The company has 75% of its sales from General Motors (NYSE:GM) and is seeing fewer orders and delayed payments from the company as auto sales reach lows not seen for a generation. General Motors also received a similar warning just a few weeks before American Axle. The auto suppliers just received a pledge of $5 billion from the U.S. government to help them survive the plunge in auto sales.

The going concern warning from MGM Mirage (NYSE:MGM) came even after the company received a waiver from its lenders through May 15 to comply with the financial covenants contained in its lending agreements. The company had its ratings cut by the S&P to "CCC" after the waiver was announced.

The auto and hotel industry are not the only ones under financial distress as retailers are also suffering from cash flow and liquidity issues. Blockbuster Entertainment (NYSE:BBI) reported a loss of $374.1 million for 2008, due partly because of a write down of goodwill. The company received a going concern warning, but like MGM Mirage, it received a temporary respite when it extended the term of its credit facility with JP Morgan (NYSE:JPM) to September 30, 2010. The renegotiation affected 65% of the total facility.

One interesting going concern warning involved Crocs Inc. (Nasdaq:CROX), the maker of the ubiquitous rubber-like shoe. The company owes $22.4 million on its credit facility and it expires at the end of March 2009. Crocs reported cash at year-end of $51.7 million so it appears that the company has burned through much of that in the first quarter, or it would be able to pay off its credit facility with the cash if it couldn't renew it.

The going concern warning that many publicly traded companies are receiving is the financial equivalent of closing the barn door after the animals have left, and does little to help investors. All it does is confirm the obvious pending financial Armageddon.