Factors that contribute to industrial sickness

This article discusses the factors that contribute to industrial sickness and how to predict it. The main causes of industrial sickness include working capital diversion, overtrading, managerial incompetence, and excess capacity. These factors can be identified using ratio analysis, which is a financial tool that measures a company’s liquidity, solvency, and profitability.

Questions

• What are the factors that contribute to industrial sickness?
• How can industrial sickness be predicted?
• What is ratio analysis?

Answers

• The factors that contribute to industrial sickness include working capital diversion, overtrading, managerial incompetence, and excess capacity.
• Industrial sickness can be predicted using ratio analysis, which is a financial tool that measures a company’s liquidity, solvency, and profitability.
• Ratio analysis is a financial tool that uses a company’s financial statements to calculate ratios that measure its liquidity, solvency, and profitability.