Do you agree or disagree with this response? Why or why not? Is there anything you think should be added to this discussion? CFOs diligently monitor various financial indicators to identify signs of excessive financial leverage within their firms. Key warning signals include a notably high debt-to-equity ratio, surpassing industry benchmarks or historical levels. If the firm struggles to meet debt service obligations, reflected in declining interest coverage ratios, it may indicate overreliance on debt financing. Additionally, insufficient cash flow to cover interest payments and maturing debts, as seen through liquidity ratios and operating cash flow analysis, could signal potential financial distress. Further concerns arise if the company experiences credit rating downgrades or a negative shift in market perception, reflected in a declining stock price. To address these challenges, CFOs may consider strategic actions such as negotiating debt refinancing or restructuring, selling non-core assets to generate cash, implementing cost-cutting measures, infusing equity through new share issuance, and engaging in transparent communication with stakeholders to manage expectations. Effectively responding to these signs allows CFOs to navigate financial challenges, implement strategic measures, and restore the firm's financial health and stability