Even an entity on a very profitable course will find itself bankrupt if it fails to meets its obligations to short-term creditors.

Question

Quizplus · Accepted Answer

Short-term creditors provide necessary funding to cover immediate expenses such as payroll, rent, and inventory. If an entity is unable to meet its obligations to these creditors, it can quickly find itself in financial distress, even if it appears to be profitable in the long-term.

Even an Entity on a Very Profitable Course Will Find