Which of the following financial factors is most likely to be a cause of a going-concern problem?
A) Excessive reliance on debt financing.
B) A high inventory turnover ratio.
C) A high current ratio.
D) Stable net income growth.

Question

Quizplus · Accepted Answer

Excessive reliance on debt financing can lead to financial distress and inability to repay creditors, making it a common cause of a going-concern problem. A high inventory turnover ratio and a high current ratio both indicate strong liquidity and efficient operations, while stable net income growth suggests profitability and sustainability.

Which of the Following Financial Factors Is Most Likely to Be