how is it that in times of crisis major businesses will go bankrupt within months? Do they have no savings or what?
In: Economics
To keep this super ELI5 you know how lots of times you hear that businesses don’t pay taxes? That’s because they take everything they earn and either reinvest it into the business or pay their employees bonuses (who then do pay taxes) and they get to appear that they’ve made no money so no taxes.
Now imagine they have no money because they’re doing accounting this way when they actually do have a period of time where they aren’t having any cash coming in they’re screwed and can’t cover expenses.
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