Question

6. Financial distress has multiple negative consequences for the companies, and if they have high business risks their assets are easily destroyed in financial distress. State some example of these assets that particularly sensitive to the financial distress and why?

Answer 1

Firms are bound to fall into monetary misery in the event that they have high business dangers and their advantages are effortlessly crushed in money related pain. For instance, firms with human capital and brand intangibles are especially touchy to monetary pain since disappointed representatives and clients can leave or look for elective providers. In Contrast, firms with unmistakable resources can sell their advantages on the off chance that they get into monetary pain, giving extra security to banks and bringing down the expenses of money related to misery. Firms which impalpable resources are thusly more averse to be profoundly utilized than firms whose benefits are generally substantial