Why could a firm that shows profits still face severe financial difficulties?

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example: company may in declining market, still show profit today. tomorrow may different story.

solution: company need seek out new products and/or services in order ensure survival in long term.

example: company's debt load may far heavy compared assets , sales. , although may making profit today, if uncontrolled, debt load may 1 day cause company fall.

solution: company need increase sales , profits, can pay down debt, otherwise future not rosy it.

what steps should taken remedy financial difficulties , why


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