Financial distress

Corporate finance - borrowing - insolvency - bankruptcy.

Financial distress is a situation in which a borrower either:

• Cannot meet its debt servicing obligations; or
• Can only do so with difficulty.

Financial distress is an indication of a high risk of insolvency or bankruptcy.

See also

• Cost of financial distress
• Debt equity ratio
• Debt service ratio
• Distressed
• Distressed assets
• Insolvency
• Interest cover
• Modigliani and Miller
• Workout