Below Are Various States of Financial Distress

question 21

Multiple Choice

Below are various states of financial distress:
Defaulting on a principal payment on debt
Restructuring debt
Liquidating a firm
Filing for bankruptcy
Failing to make a required interest payment on time
What is the order of increasing gravity that analysts typically consider when assessing credit risk and bankruptcy risk according to a continuum of financial distress?

• A) 5, 1, 2, 3, 4
• B) 5, 2, 1, 4, 3
• C) 1, 5, 2, 4, 3
• D) 1, 5, 2, 3, 4

---

Definitions:

Taylorism

A management theory developed by Frederick W. Taylor, focusing on efficiency and productivity through scientific analysis of labor processes.

Consumer Needs

The basic or identified wants and requirements that individuals seek to fulfill with products or services.

Boredom

A state of feeling disinterested, weary, or unenthused about an activity or situation, often due to a lack of stimulation or engagement.

Alienation

A condition in social relationships reflected by a low degree of integration or common values and a high degree of distance or isolation between individuals, or between an individual and a group.