Question
In: Finance
In an early stage business, what do you believe would be your working capital philosophy; (1)...
In an early stage business, what do you believe would be your working capital philosophy; (1) a liberal credit and collection policy to get as many customers in as possible or (2) a strict credit and collection policy to take very good care of precious working capital? Would your opinion be different if the company was funded out of your pocket or funded by a professional investment firm like Private Equity?
In a later stage business, what believe would be your working capital philosophy; (1) paying bills as soon as they come in the door to maximize vendor relationships and goodwill or (2) paying bills on he last possible day to maximize cash on hand and working capital? Would your opinion be different if the company was funded out of your pocket or funded by a professional investment firm like Private Equity?
In general in business, what do believe would be your working capital philosophy; (1) keeping a broad array and as much inventory on hand as possible to make sure that you never miss a sale or (2) stocking only a few items and maximizing the inventory turnover?
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Expert Solution
In an early stage business, what do you believe would be your working capital philosophy; (1) a liberal credit and collection policy to get as many customers in as possible or (2) a strict credit and collection policy to take very good care of precious working capital?
Answer: (2).
Would your opinion be different if the company was funded out of your pocket or funded by a professional investment firm like Private Equity?
No, the source of capital will not make the opinion differ.
In a later stage business, what believe would be your working capital philosophy; (1) paying bills as soon as they come in the door to maximize vendor relationships and goodwill or (2) paying bills on he last possible day to maximize cash on hand and working capital?
Answer: (2)
Would your opinion be different if the company was funded out of your pocket or funded by a professional investment firm like Private Equity?
No, the source of capital will not make the opinion differ.
In general in business, what do believe would be your working capital philosophy; (1) keeping a broad array and as much inventory on hand as possible to make sure that you never miss a sale or (2) stocking only a few items and maximizing the inventory turnover?
Answer: [2]
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