FIN 419 Week 3 Discussion Question 2

Mar 28th, 2015
Business Finance
Price: $5 USD

Question description

Without zero working capital, does the money have excess to invest? It seems that the business is essentially living paycheck to paycheck without any room for financial growth, or benefit to the owners. I think I may misunderstand the meaning of zero working capital, but it does not sound like something advantageous. I do understand what you mean though about not having liabilities or debts, as the company is always running on what it does have, instead of what it does not.

Consider though, the importance of a business having debts. Although most people think of debt as a bad thing, debt can also be seen as a good thing as there are good types of debt. Debt can also help build credibility and creditworthiness. Do you agree? How can a business build its creditworthiness without having any type of financial obligations to be compared to? What are your thoughts on this?

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