[Reporter] Financial distress is often defined as the looming threat of bankruptcy, which hinges on a company's liquid assets and access to credit. It typically arises when a business posts consecutive losses--negative pre-tax operating income or net income--for at least three years. Empirical analysis reveals that once a company enters financial distress, it faces severe cash flow constraints and is often forced to halt dividend payments. Sharp dividend cuts, combined with sustained negative income, serve as early
