CA Inter P6 · Chapter 13 · Question 6 of 11
Which of the following is generally a sign that a firm needs a turnaround strategy?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Persistent negative cash flows, falling market share and mounting uncontrolled costs
Explanation
Turnaround becomes necessary when a business shows signs of sustained decline: continued negative cash flows, falling market share, rising and uncontrolled costs, high employee turnover, declining capacity utilisation and weak management. The other options indicate a healthy business.
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