Financial Distress
Financial Distress refers to a state in which a business or individual cannot meet their financial obligations as they come due, leading to potential bankruptcy, insolvency, or liquidation. It can be caused by various factors such as poor financial management, economic downturns, excessive debt financing, and unforeseen expenses. The consequences of financial distress can include loss of control over the business, damage to reputation, and long-term negative effects on creditworthiness. Financial distress is often characterized by a lack of cash flow, high levels of debt, and an inability to obtain new sources of financing. It requires careful management and strategic decision-making to navigate through and ultimately overcome.