Tom Andersen owns an electronics firm in Wichita, Kansas. He has told you that he has been suffering some cash flow problems, but has avoided having to borrow money by letting some of his bills run late. When you raised your eyebrows in response to hearing these comments from Tom, he said, “Don’t worry. I’m really not nervous about this situation in that I have some large orders coming in soon. I’ll use the cash from these orders to catch up on my bills.” Does what Tom told you seem to be a sound strategy for him to follow? What are the downsides associated with how Tom is approaching his cash flow issues?
Answer to relevant QuestionsFriends of your parents are having dinner in your home. The friends are interested in launching an entrepreneurial venture and are expressing some of their views about doing so to your parents. You’ve been asked to join ...Complete Jack and Sarah’s list for them, including the issues you think they will place on the list along with their recommendations. Which of the issues do you think will stimulate the most discussion with the attorney, ...As related to ethics and ethical behavior, what are the characteristics you anticipate are associated with the cultures at CoachUp and Charity:Water? Why is it that a company can grow too fast? If Wise Acre Frozen Treats significantly increased its sales, why wouldn’t its increased income provide more than enough cash to even out its cash flow? What is meant by the term working capital? Why is working capital an important consideration for entrepreneurial firms?
Post your question