The failure of leading corporations has rekindled interest among researchers, practitioners and academics in financial crisis. Financial difficulty occurs when a company’s operating cash flow falls short of satisfying its existing obligations. Currently, the fear of insolvency is the most significant problem for businesses concerns irrespective of sizes and sectors. Many stakeholders are concerned about a company’s corporate health, including managers, investors, policymakers, and industry participants. There are various reasons and factors for the considerable emphasis on preventing and mitigating a corporate downturn. This paper aims to review recent developments in financial crisis and business recovery. We mainly concentrate on the factors, tools, and theories that can be applied to develop prediction model, explanations on financial difficulty as well as long-term solutions for financial problem. The study concludes by outlining key findings and discussing their policy implications.