Business failure


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Business failure

A business that has terminated operations with a loss to creditors.

Business Failure

A situation in which a company or other business ceases operations because it is unable to generate sufficient revenue to cover its expenses. For example, if a company is unable to service debt it may file for bankruptcy and stop operating. Business failure is relatively common in the first year or so of operations because the owner is unable to compete for any number of reasons.
References in classic literature ?
His telegraph was then, as it is to-day, a business failure.
Raised in unrivalled prosperity, we inherit an economy that is still the world's strongest, but is weakened by business failures, stagnant wages, increasing inequality, and deep divisions among OUR OWN people.
By DAVID COLEMAN BUSINESS failure rate has dropped by almost one fifth this year, it emerged yesterday.
08% for the last four surveys - the first time since 2007 - suggesting a more stable trading environment and increased resilience to business failure.
Numerous business failure studies have been performed over time using traditional statistical techniques and financial ratios as input variables.
This paper investigates the impact of the intervention of Tax Reform Act on the business failure momentum.
It problems were also identified by 31% of respondents as the most common cause of total business failure.
Following the highest increase in business failures since 1999 during the first quarter of 2006, the latest figures indicate a slowdown in the rate of increase of business failure but still mean that 80 companies went bust in the UK every working day of the year so far.
Significant findings include: Construction companies have had the highest business failure rate of any other sector in the economy since 1988; Over 90% of New York construction companies employ less than 25 employees; Financially successful contractors in New York City tend to be union contractors.
These lessons serve to improve the quality of financial statement audits by helping CPAs identify possible early warning signs and risks of accounting chicanery, fraud, inaccurate financial reporting, and business failure.
Unfortunately, every time there is a business failure someone assumes the auditors have failed.

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