As the firm transitions to being publicly traded financing c

As the firm transitions to being publicly traded, financing choices increase. While revenue is growing rapidly, earnings and cash flow likely lag behind revenue growth and external cash is needed. This is which phase?

Question 3 options:

Start-up

Expansion

High growth

Mature

Start-up

Expansion

High growth

Mature

Solution


Correct option is > High growth

High growth phase firms need external cash to manage the working capital gaps. Cash flow lag behind from revenue growth.

As the firm transitions to being publicly traded, financing choices increase. While revenue is growing rapidly, earnings and cash flow likely lag behind revenue

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