why

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School

Moi University *

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100

Subject

Finance

Date

Nov 24, 2024

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docx

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2

Uploaded by ProfessorZebraMaster753

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a) Why-1: Why does the Company need to be fixed? Answer: The Company needs to be fixed because it is facing financial issues. b) Why-2: Why is the Company facing financial issues? Answer: The Company is facing financial issues because Partha resorted to taking debenture loans at high interest rates, putting a significant strain on the Company's finances. c) Why-3: Why did Partha take high-interest debenture loans, and why did it lead to his health problems? Answer:
Partha took high-interest debenture loans due to the instability of the Company's finances. This instability created stress and pressure, contributing to his health problems. d) Why-4: Why did the Company's finances become unstable in the first place? Answer: The Company's finances became unstable because it encountered cash flow problems when borrowing additional money for unrelated projects. This extra debt weakened its financial position. e) Why-5: Why did the Company take on more debt for unrelated projects? Answer: The Company took on more debt for unrelated projects, leading to a high net debt-to-EBITDA ratio because it needed to support side initiatives. This further exacerbated its liquidity crisis and financial difficulties.
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