Business FinancesQuestion 48 of 1605
A contractor's accounts receivable are growing while cash on hand is shrinking. This most likely indicates:
a.The business is highly profitable
b.Customers are not paying on time
c.Overhead is well controlled
d.The contractor is bidding too low
Explanation
Growing receivables with shrinking cash means customers owe money but haven't paid. This is a classic cash flow problem — the contractor has earned revenue but cannot collect it timely.
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