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Which of the following are factors which can lead to a supplier becoming insolvent? Select THREE
Suggested Answer: A, B, C
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1 2 and 3 are factors which can lead to a supplier becoming insolvent. 4- increased market share is a good thing, as it indicates the supplier is doing better than their rivals. A high financial ratio is also a good thing as it shows they have more assets than debt - so this is not a sign of insolvency. See p.24 for 'Supplier Risks'
5 comments · newest first
MY
Myrtie
4 days ago
A) fraudulent activity is definitely a factor.
MA
Malcolm
9 days ago
I feel like attrition of key employees could impact a supplier's stability, but I need to double-check that.
EL
Elouise
14 days ago
Increased market share doesn't sound like it would lead to insolvency, but I could be wrong.
SY
Sylvie
19 days ago
I remember discussing uncontrolled expenditure in class; it seems like a likely cause of insolvency.
ME
Melina
24 days ago
I think fraudulent activity is definitely one of the factors, but I'm not sure about the others.