How is it possible for a company to show positive net income but go bankrupt?
How is it possible for a company to show positive net income but go bankrupt?
- It usually happens when an organization comes under the exposure of over-trading, slow recovery of accounts receivables, increased inventories, growing accounts payables.
- Two examples include deterioration of working capital (i.e. increasing accounts receivable, lowering accounts payable), and financial shenanigans.
