Financial distress

Difficulty meeting financial obligations as they become due. The assessment depends on cash timing, operating inflows, available assets, financing and obligations, not simply whether total liabilities exceed current cash.

Financial distress in round numbers

Hypothetical, in US$ millions: 5.0 is due next quarter and current cash is 1.2, an initial gap of 3.8. Assume operating inflows, realizable assets and additional financing cannot cover that gap. A fully drawn credit line alone would not establish that every other funding source is unavailable.

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