Is it possible for a company to show positive net income and still go bankrupt?

Q: Explain with an example of how a healthy company might not have a spectacular ROE because there is…

A: Return in Equity or R.O.E. Return on equity refers to as the percentage of return, a company is…

Q: Is it feasible for a new company endeavor to be lucrative while also experiencing financial…

A: Introduction: According to Entrepreneur, it takes a minimum of three years for a company to become…

Q: What interpretation can be made from this equity figure? a.It is a negative figure, so…

A: Here discuss about the details of the decision to make whether the business entity are in the…

Q: What are some situations other than immediate financial distressthat lead firms to file for…

A: Financial distress is the essential cause or the key reason for liquidation; it happens when…

Q: Explain how a business can earn a positive gross profit on its sales and still have a net loss.

A: Gross profit: It can be defined as the difference between the cost of goods sold and the net sales…

Q: What are the possible actions when a business becomes insolvent?

A: Insolvency occurs when a person or business is unable to service the debt to lenders as debts come…

Q: Which of the following terms refer to the situation in which a firm has negative net worth?…

A: Net worth is computed by subtracting the total liabilities of the company from its total assets,…

Q: Which of the following could be the reason for the capital increase of a collective company? A) The…

A: Collective company- A collective business system, also known as a collective business model, is a…

Q: ocks are proof of ownership in the company. Imagine a warehouse of goods to be sold where different…

A: It depends the risk profile of investor and objective of investment where to invest.

Q: Using profit as the sole guide for corporate action can lead to short term profits but: B a.)…

A: Business may earn initially from customer by charging higher price but in long run the customer will…

Q: If the book value of the liabilities exceed the market value of the assets, which of the following…

A: Book Value of the liabilities exceed the market value of assets It means assets are insufficient to…

Q: Explain how a firm that never files for bankruptcy can still suffer from indirect bankruptcy costs.

A: Financial distress is a condition in which the company is unable to repay or meet its obligations to…

Q: Which of the following objectives of the company creates immoral practices such as: corrupt…

A: In Welfare maximisation, company works for the wellbeing of society, people, environment etc. If an…

Q: 6. Business risk is that type of risk in which: a) The company is unable to meet its financial…

A: Types of risk consist of financial risk, operational risk and business risk.

Q: Which of the following would increase the likelihood that a company would increase its debt ratio,…

A: Cetris Perbius Means Other things remaining constant, if the company is considering to increase the…

Q: Is it feasible for a new company endeavor to be lucrative while still experiencing financial…

A: Meaning of Lucrative Lucrative which simply describes as brings profitability into the business…

Q: Explain two possible risks to a company that makes losses regularly?

A: There are many possible risks of bussiness losses.

Q: Why do business go bankrupt?

A: A business is described as an enterprise or enterprising entity engaged in commercial, industrial,…

Q: What would be a reason a company would want to overstate income?A. to help nudge its stock price…

A: Income of the business is very important and useful measure of profitability of the business. More…

Q: Answer true or false and explanation to why. Restructuring the liabilities might positively…

A: Debt and liability restructuring is the process of settling all owing and unpaid liabilities by…

Q: A company expected to go bankrupt in the near future is considered to be operating under the…

A: Three fundamental assumptions of accounting are: 1.Going concern assumption 2. Accrual 3.…

Q: Why do you believe businesses rely heavily on revenue recognition to inflate profits

A: Here is the Answer

Q: Can a business earn a gross profit but incur a net loss? Explain.

A: Gross Profit: Gross profit represents the revenue after the deduction of cost of goods sold from the…

Q: Which of the following can impose serious economic consequences on a businessman? O a. Having more…

A: Sole proprietor or businessman has a disadvantage of unlimited liability under sole proprietorship…

Q: How important is profit? How can a company survive when it isn't making a profit? How can a company…

A: profit is the most important thing for business order to exist for a longer period of time and have…

Q: Explain what "financial distress" means. Let's say that a company is in financial difficulties, and…

A: Introduction: Financial Distress is defined as a scenario in which a company's obligations, such as…

Q: A company has a history of losses and has a negative balance (a debit) in retained earnings. On the…

A: The retained earnings comprises of net income or losses of the prior period.

Q: For a company emerging from bankruptcy, how are liabilities (other than deferred income taxes)…

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: Who is responsible for the liabilities of a company and the risk of its value dropping to zero? a.…

A: There are various stakeholders who are part of the functioning of the company. It includes…

Q: A company that is breaking even is making a profit. ( a) True ( b) False

A: Introduction:- Break-even point point means, where no profit or loss At Break-even point point,…

Q: People cannot invest in companies. True or false

A: The term company refers to a separate legal entity that has the right to continue its operations.…

Q: Can a business earn a gross profit but incur a net loss?

A: Gross Profit is computed by deducting cost of goods sold from the sales revenue of the business. And…

Q: Classify the following events as mostly systematic or mostly unsystematic. Is the distinction clear…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Is debt good for a company? Why or Why not?

A: In terms of finance, debt can be defined as the borrowed money on which the borrower of the fund is…

Q: Most businesses fail because their A) net working capital B) cash flow C) liabilities D) tax shield

A: Bussiness need money continuously to operate so business can not survive for much longer term if…

Q: Which of the following liquidating dividend is not legal?    a. Liquidating dividend of a continuing…

A: When a firm is insolvent and unable to pay its debts, it may be liquidated. At the time of…

Q: n as a remedy for agency costs and -problems, and therefore create value in companies. However, in…

A: Debt are important source of capital but too much debt will create problems.

Q: True of False? Contributed capital decreases when the company has a net loss. If your answer is…

A: Net income is an excess of revenue over expenditure and Net loss indicates that there are more…

Q: Compare and contrast the net income margins of both Company A and B. Do you think the company with…

A: Net income margin = net income/sales

Q: Which of the following is NOT an effect of the possibility of bankruptcy? O reduce the possible…

A: Interest rate on debt are fixed in nature but decided with rating of company. The interest rate are…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.