(a) (i) Discuss the theories, or arguments

(a) (i) Discuss the theories, or arguments, which suggest that financial analysis can be used to forecast the probability of a given firm’s failure; and

(ii) explain why such an analysis, even if properly applied, may not always predict failure.

(b) Discuss the following statement: ‘It is always a sound rule to liquidate a company if its liquidation value is above its value as a going concern.’