What was the real cause for their running out of cash

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Why is it possible for a company to show a profit on their income statements and still go bankrupt? If you were looking at the financial statements of a company, how would you go about satisfying yourself that a company was not having cash flow problems? Can you relate any examples of a business going bankrupt, or having to close because of cash flow problems, that you are familiar with; and in your opinion, what was the real cause for their running out of cash.

Reference no: EM13137027

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