Financial Distress is a condition in which a company or individual cannot generate sufficient revenues or income, making it unable to meet or pay its financial obligations. This can be due to various factors such as economic recession, mismanagement, and fraud. When a company is experiencing financial distress, it may have to reduce staff, sell assets, and/or file for bankruptcy protection.Individuals who are experiencing financial distress may also have to sell assets and/or declare bankruptcy. Although being in debt is not always indicative of financial distress, it can often lead to this condition if left unmanaged. It's important for companies and individuals alike to take steps early on to prevent or mitigate any potential damage caused by financial distress.
