Which financial factor in the following list 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 a high debt-to-equity ratio, which can become unsustainable and lead to bankruptcy if the company is unable to meet its debt obligations. This can be a key factor in a going-concern problem.

Which Financial Factor in the Following List Is Most Likely