Question

Sick Industries are incurring losses from the past

1.Five Years
2.Many Years
3.One Year
4.Two Years​

Answer 1

Answer:

Many Years

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Answer 2

Answer:

The required answer is an option (1) Five Years

Explanation:

• A consistent mismatch in the debt-to-equity ratio and distortion in the unit's financial status are both considered symptoms of industrial disease. A sick unit is one that is unable to function properly with its own internal resources.

• Industries are compelled to rely on external sources of funding after the sick units continue to function below the break-even point (at which total revenue equals total cost).

• A sick unit is one that has recorded a cash loss for the operating year and, in the opinion of the financing bank, is likely to experience a cash loss for the current year as well as the one after, according to the Reserve Bank of India's recognized standards. Visit the linked page to learn more about the Reserve Bank of India.

• According to the 1958 Sick Industrial Enterprises Act, a company is classified as SICK if it has losses five years in a row. The government is then tasked with taking care of these companies and helping them to recover.

The Sick Industrial Companies (Special Provisions) Act of 1985 provided the first official definition of industrial illness by the government.

A medium or big (i.e., non-SSI) corporation was deemed sick under this Act if:

(1) It had a minimum of seven years of registration (later reduced to 5 years)

(2) It suffered cash losses both this year and the year before.

(3) All of its assets, including reserves and paid-up capital, were lost.

Therefore, Sick Industries are incurring losses from the past (1) Five years

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