Question

    A firm shows Net Profit ₹30 cr but Operating Cash Flow

    only ₹5 cr due to heavy receivables. Next year TL obligation ₹25 cr. What is the primary risk?
    A Profitability risk Correct Answer Incorrect Answer
    B Market risk Correct Answer Incorrect Answer
    C Liquidity & default risk Correct Answer Incorrect Answer
    D Accounting risk Correct Answer Incorrect Answer
    E Tax risk Correct Answer Incorrect Answer

    Solution

    Low cash flow → inability to service debt.

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