The Text Discusses Various Factors That Relate to the Risk

question 6

Multiple Choice

The text discusses various factors that relate to the risk of a company facing financial distress or bankruptcy. Which of the following might be in indicator of higher risk, based on the discussion in the text?

• A) The company has a low rate of asset turnover.
• B) The company's assets are mostly liquid assets.
• C) Most of the company's debts are long-term, not short-term.
• D) The company's sales levels do not vary much from year to year.