A ﬁrm that has a series of negative earnings, sales declines and workforce reductions is likely head to:

Question

Quizplus · Accepted Answer

A firm with a series of negative earnings, sales declines and workforce reductions is likely to be facing financial distress. This could be due to a variety of factors such as mismanagement, competition, or industry changes. The other options such as a change in management or new financing may be possible solutions to address the financial distress, but they are not necessarily the immediate outcome. A merger may also be a possible solution but only if there is a potential partner willing to merge with the struggling firm.

A ﬁRm That Has a Series of Negative Earnings, Sales