Description

Signs of Financial Distress details the reasons a company may find itself in distress and the signs that outsiders should watch out for.

Learning Objectives

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1. Identify the early warning signs of financial distress, including operational underperformance, liquidity problems, and worsening credit metrics.
2. Analyze the impact of long-term declines in sales and profitability on a company's financial health.
3. Evaluate the significance of liquidity problems and their potential consequences for a company's ability to meet short-term obligations.
4. Compare the leverage ratios and interest coverage ratios to assess a company's credit quality and financial stability.
5. Recognize common accounting issues such as revenue and expense recognition, and their effects on a company's financial statements.