The various causes that increase the chances of business failures are current ratio of 1.33, solvency ratio of greater than 20%, and rapid decrease in days' sales outstanding.

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These factors are actually indicators of financial stability and would decrease the chances of business failure. A current ratio of 1.33 indicates that the company has enough current assets to cover its current liabilities, a solvency ratio of greater than 20% indicates that the company has enough assets to cover its long-term debt, and a rapid decrease in days' sales outstanding indicates that the company is collecting its accounts receivable more quickly, improving its cash flow.

The Various Causes That Increase the Chances of Business Failures