The best way for a firm to avoid serious cash flow problems is to sustain a rapid growth in sales.

Question

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Rapid growth can put a serious strain on a company's cash position. For example, a firm may be able to expand its sales rapidly by offering very easy credit, but if customers who buy on credit are late with their payment (or, even worse, default on their payments) the company could have serious problems with its cash flow.

The Best Way for a Firm to Avoid Serious Cash