Indirect costs of financial distress

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Indirect costs of financial distress

Costs such as lost business as a result of bankruptcy or liquidation.

Indirect Costs of Financial Distress

Revenue or profit that a company could have made, had it not gone bankrupt. Indirect costs of financial distress are lost business that occurs because potential customers do not wish to take the risk of using a company that may not be able to deliver its goods or services. As with other indirect costs, the indirect costs of financial distress are difficult to calculate with certainty.