Cash flow management may be more challenging for a merchandiser than a service business for which of the following reasons?

Question

Quizplus · Accepted Answer

Merchandisers must purchase inventory before they can sell it, which requires a significant amount of cash up front. Service businesses, on the other hand, typically do not have to make significant purchases to provide their services, so they may not face the same cash flow challenges as a merchandiser.

Cash Flow Management May Be More Challenging for a Merchandiser