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Which of the Following Are Potential Indicators of Financial Distress

Question 10

Multiple Choice

Which of the following are potential indicators of financial distress?
(i) A sudden drop in share price
(ii) Increased turnover
(iii) Increased gearing ratio
(iv) Fall in profits


A) All of them could indicate financial problems
B) None of these factors would cause much concern, especially in isolation
C) (i) , (iii) and (iv) are bad news, but increased turnover would be good news
D) (i) and (iv) are indicators, but (ii) and (iii) are improvements to the financial position

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