ASSESSING THE MORTALITY RISK OF A BUSINESS

Denise Guithues Amrhein and Jerome A Katz
Additional contact information
Denise Guithues Amrhein: School of Business and Administration, Department of Management, Saint Louis University, USA
Jerome A Katz: School of Business and Administration, Department of Management, Saint Louis University, USA

Journal of Enterprising Culture (JEC), 1999, vol. 07, issue 01, 65-88

Abstract: A number of studies have examined the factors affecting the mortality risk of a business. One factor that has not been given sufficient attention is the area of cash flow and working capital management. In order to make informed business decisions, the business owner is dependent on cost estimates and other financial projections that provide a view of the business in its entirety. Regardless of whether a company is a start-up or an ongoing business, financial projections are crucial to successful management, providing an important test of feasibility for new firms and giving existing businesses a chance to spot problems and make corrections before it's too late. Ultimately, the true test of survivability of a business is its bottom line. However, in the interim, the degree of a company's liquidity provides a critical measure of its mortality risk. Even if a company is earning net income, it still takes cash to pay the bills. Properly managing the area of working capital and cash flows is essential to the survival and growth of a business. This is particularly true of smaller firms who experience different circumstances than large firms including fewer available resources.

Date: 1999
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0218495899000054
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:jecxxx:v:07:y:1999:i:01:n:s0218495899000054

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0218495899000054

Access Statistics for this article

Journal of Enterprising Culture (JEC) is currently edited by Teck-Meng Tan

More articles in Journal of Enterprising Culture (JEC) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().