This study investigates early warning indicators of bankruptcy risk in State-Owned Enterprises (SOEs) in Zambia, with an emphasis on the predictive importance of liquidity ratios. Using a quantitative approach, the research analyses financial data from a sample of SOEs to examine the relationship between key financial ratios and bankruptcy outcomes. The analysis employed descriptive statistics, correlation analysis, and visual comparisons to identify significant patterns. The findings reveal that lower liquidity ratios are significantly associated with higher bankruptcy risk, highlighting liquidity as a critical early warning indicator. Other ratios, including solvency, profitability, and acid-test ratios, showed weaker and less consistent associations with bankruptcy. These results underscore the importance of monitoring liquidity in SOEs as part of effective financial management and risk mitigation strategies. The study contributes to understanding financial distress in SOEs and offers practical insights for policymakers and managers seeking to improve financial sustainability.