This is the condition in which a firm is near bankruptcy.

Question

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Financial distress is the condition in which a firm is near bankruptcy, meaning it's unable to pay off its debts and meet its financial obligations. This can occur due to a variety of reasons such as a decline in sales, faulty investments, or unexpected expenses. A passive or active capital structure refers to the way a firm finances its activities and does not necessarily indicate financial distress. A call position refers to an option contract that allows the holder to purchase a particular asset at a specific price, and is not related to the financial state of a company.

This Is the Condition in Which a Firm Is near Bankruptcy