Companies should put their financials through a ________ by showing how they expect the business to perform in different situations.
A) budget test
B) cash flow test
C) dry run
D) stress test
E) reality check

Question

Quizplus · Accepted Answer

Stress testing involves putting a company's financials through different scenarios to see how it would perform under adverse conditions. This test helps to identify vulnerabilities in the company's financial structure, allowing management to take corrective measures before actual stress events occur. Thus, stress testing is necessary for a company to ensure its financial resilience and long-term success.

Companies Should Put Their Financials Through a ________ by Showing