Successful, fast growing businesses can fail due to a shortage of cash because their main source of funds are tied up in receivables, which are monies owed to the company by its customers.

Question

Quizplus · Accepted Answer

A business can be profitable but still face cash flow issues if its funds are tied up in receivables, leading to a lack of available cash to meet immediate expenses.

Successful, Fast Growing Businesses Can Fail Due to a Shortage