Tammy is talented at craft but lacks the cash flow management skills required to run a business.She opens a store,Tammy's Craft Corner,with the help of her son David-a business major.Within a few months,the sales increase exponentially which results in a shortage of cash needed to expand their business.This crisis is termed _____.

Question

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The scenario described is a classic example of a growth trap, where a business experiences rapid sales growth but doesn't have the necessary cash and resources to sustain that growth. This can lead to cash flow shortages and an inability to fund expansion plans. Nonsufficient funds refers to a situation where a business doesn't have enough cash in their bank account to cover a payment. Chargeback refers to a customer disputing a payment and getting their money back. Reconciling refers to the process of matching a business's financial records with their bank statement.

Tammy Is Talented at Craft but Lacks the Cash Flow