Which of the following are factors which can lead to a supplier becoming insolvent? Select THREE

Which of the following are factors which can lead to a supplier becoming insolvent? Select THREE
A . fraudulent activity
B. attrition of key employees
C. uncontrolled expenditure
D. increased market share
E. a high financial ratio

View Answer

Answer: A,B,C

Explanation:

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’