Bankruptcy is the process by which an entity can get a "fresh start" by canceling or significantly restructuring its existing debt through the order of a judicial body. Business failures can lead to bankruptcy for various reasons. Consider the following case: Universal Drapers Inc., a garment export company, was established in 2004. Over the past five years, the company has been financing its growth with debt and had 75\% debt in its capital structure. The economic downturn had a drastic impact on Universal Drapers Inc.'s business, causing cash flows to decline, and the company could not make payments toward its debt. Universal Drapers decided to declare bankruptcy in early 2010. Based only on the information given in the case, what is the most likely cause of Universal Drapers Inc.'s failure? Price wars with competition Loss of clients Tax-related problems Inability to service debt Suppose you are a part of the senior management of a company that is in financial distress. Which of the following issues would you focus on addressing immediately? Check all that apply. Identify whether the problem is an inability to service short-term debt or a problem where asset values will fall below the value of obligations in the future. Estimate the firm's projected asset values in the future and its impact on business operations. Identify strategies for the modified dividend policy for the following year. Identify whether the problem is temporary, and then work out a deal with creditors that allows the firm more time to recor and make payments. Estimate the value of business operations, and compare it with the value of the assets if the business were liquidated