What is meant by the term 'financial distress'?
A) Where there are low levels of income
B) Where obligations to creditors are not met or are met with difficulty
C) Where obligations to shareholders are not met or are met with difficulty
D) Where levels of taxation are high

Question

Quizplus · Accepted Answer

Financial distress refers to a situation where a company is not able to meet its obligations to creditors. This can be due to various reasons like low revenue, high expenses, high debt, etc. It is a sign of financial instability and can lead to bankruptcy or insolvency if not managed properly.

What Is Meant by the Term 'Financial Distress