Which of the following terms describes when a firm is unable to pay its liabilities as they come due because assets cannot be converted into cash within a reasonable period of time?

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A liquidity crisis occurs when a firm is unable to pay its liabilities as they come due because assets cannot be converted into cash within a reasonable period of time. This is different from insolvency bankruptcy, which refers to when a firm's liabilities exceed its assets, and technical insolvency, which refers to when a firm is able to pay its debts but its liabilities exceed the current value of its assets. Economic failure refers to a situation where a firm is unable to sustain profitability over the long term.

Which of the Following Terms Describes When a Firm Is