27 Analyse how liquidity issues & over expansion can lead towards a business failure. [6]

[Abbas17]

(KN) Cash Flow Constraints
(AN) Liquidity issues can result in cash flow constraints, making it challenging for a business to meet its short-term obligations such as paying suppliers, employees, and covering operational expenses.
(AN+) Insufficient cash flow can lead to financial distress, hinder growth initiatives, and ultimately result in business failure.

(KN) Overextension of Resources
(AN) Over-expansion can strain a business's resources, including capital, manpower, and infrastructure. This can lead to operational inefficiencies
(AN+) Proper resource planning and phased expansion strategies are essential to manage resources effectively and prevent overextension.

[Areena]

Kn] uncertain quality
[An]when a business experience shortage of cash and cant fulfill its expenses it may effect the quality of the product .
[An+] which will leads to reduction in customer satisfaction and loyalty hence deteriorate brande image

[Kn]cant adapt the changes in the demand more rapidly
[An] due to shortage of cash business is unable to adapt the changes more swiftly which will lower the consumer base as people have converted it self to the new trend
[An+] hence deteriorating brand image as there product will be outdated

[Salman Khalid]

(KN) Cash Flow Constraints
(AN) Liquidity issues can result in cash flow constraints, making it challenging for a business to meet its short-term obligations such as paying suppliers, employees, and covering operational expenses.
(AN+) Insufficient cash flow can lead to financial distress, hinder growth initiatives, and ultimately result in business failure.

(KN) Overextension of Resources
(AN) Over-expansion can strain a business's resources, including capital, manpower, and infrastructure. This can lead to operational inefficiencies
(AN+) Proper resource planning and phased expansion strategies are essential to manage resources effectively and prevent overextension.

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[Huma Junaid]

[KN]Inability to Cover Operating Expenses
[AN] it may struggle to pay day-to-day operational expenses, such as rent
[AN+] This can disrupt normal business operations and lead to a decline in product or service quality

[KN]mismanagement
[AN]Rapid expansion can strain the management team's ability to oversee and control the business
[AN+] leading to poor decision making