- This topic has 1 reply, 2 voices, and was last updated 11 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
Over-capitalisation is when the working capital is too high (because, for example, we are taking too long to collect receivables).
Over-trading is when the company has been expanding rapidly and so with higher sales they are needing to accept higher receivables etc., but they have not raised more long-term capital to finance the extra working capital needed and so they are forced into having an overdraft and therefore potential liquidity problems.
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.