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BUSINESSES IN DIFFICULTY
Businesses in difficulty
• In addition, it is important that you understand the
essence of financial distress.
• Financial distress is a condition where a company
cannot meet, or has difficulty paying off its financial
obligations to its creditors as it falls due and
payable.
• The chance of financial distress increases when a
firm has high fixed costs, illiquid assets, or revenues
that are sensitive to economic downturns.
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