Nancy Corporation is suffering from financial distress as it can be seen from its balance sheet: YEAR O YEAR 1 YEAR 2 Current assets Fixed assets $100,000 $100,000 $100,000 100,000 100,000 100,000 Total assets $200,000 $200,000 $200,000 Total debt $ 0 $100,000 $250,000 Equity Common stock 200,000 200,000 200,000 Retained earnings 0 -100,000 -250,000 Total equity 200,000 100,000 -50,000 Total debt and equity $200,000 $200,000 $200,000