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Explain how rapidly expanding sales can drain the cash resources of a firm?

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βˆ™ 2010-05-16 18:54:15

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Rapidly expanding sales will require a buildup in assets to support the growth. In particular, more and more of the increase in current assets will be permanent in nature. A nonliquidating aggregate stock of current assets will be necessary to allow for floor displays, multiple items for selection, and other purposes. All of these "asset" investments can drain the cash resources of the firm.

2010-05-16 18:54:15
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Q: Explain how rapidly expanding sales can drain the cash resources of a firm?
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