One major problem that new ventures face is cash flow. Many profitable firms fail because of lack of cash. Thus, using profit as a measure of success for a new venture may be deceiving if there is a significant negative cash flow.

Question

Quizplus · Accepted Answer

Profit does not account for the timing of cash inflows and outflows, so a profitable firm can still face cash flow issues if it cannot meet its immediate financial obligations.

One Major Problem That New Ventures Face Is Cash Flow