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Thursday, March 5, 2015

Real Businesses - The Success Paradox

Inventories grow
Receivables thrive
Payables vegetate
Liquidity withers

Frozen Working Capital
Inventory minus Payables
Plus Receivables
Sucks up cash
Locks it out of reach
It is a Greedy Beast

Business growth is Success
But it feeds the Greedy Beast
Beware the spectre of Liquidity Risk
The bedfellow of Bankruptcy

Reduce inventory days
Increase payable terms
Shrink receivable days
Release oodles of loot
Rein in the Greedy Brute

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