A business person's failure to realize the firm is carrying self-liquidating inventory can result in inadequate financing arrangements.

Question

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If a business person fails to realize that their firm is carrying self-liquidating inventory, they may not be aware of the cash flow that will come in from the sale of that inventory. As a result, they may not secure enough financing to cover any short-term cash flow gaps, which could lead to inadequate financing arrangements.

A Business Person's Failure to Realize the Firm Is Carrying