how is it that in times of crisis major businesses will go bankrupt within months? Do they have no savings or what?
In: Economics
I make widgets and sell them.
Another company buys my widget but they have 3 months to pay me.
They go bust and do not pay me. I have now no money for the widgets I made and I have to pay for the materials and wages.
I go bust and don’t pay the company that sold me the materials.
Much of business works on credit.
Latest Answers