Assets collect risks around them in one form or another. Inventory is one risk, and accounts receivable is another risk. Michael Dell, founder and CEO of Dell Technologies.
All businesses face the ongoing challenge of generating cash flows in excess of their borrowings. If a business is unable to pay its debts owed, it is no longer a going concern and will face reorganisation or liquidation. Nevertheless, profitability is not necessarily a prerequisite for a businesss ongoing survival. A business can keep losing money if investors keep pumping cash back in, often in the vain pursuit of growth opportunities that, for some reason, cannot be funded through existing profitable operations.
Watch for the death spiral
Some businesses may ev…
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