The danger of high growth combined with a large non-cash working capital base - a descriptive analysis

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dc.contributor.authorSteyn, B. W.en_ZA
dc.contributor.authorHamman, W. D.en_ZA
dc.contributor.authorSmit, E. v d M.en_ZA
dc.date.accessioned2013-01-23T11:51:30Z
dc.date.available2013-01-23T11:51:30Z
dc.date.issued2002
dc.descriptionCITATION: Steyn, B. W., Hamman, W. D. & Smit. E. v d M. 2002. The danger of high growth combined with a large non-cash working capital base - a descriptive analysis. South African Journal of Business Management, 33(1):a696, doi:10.4102/sajbm.v33i1.696.
dc.descriptionThe original publication is available at https://sajbm.org
dc.description.abstractA high growth rate may not be the ultimate measure of a successful company. This article shows that growth at too high a rate, for a company with a high non-cash working capital component, may lead to financial difficulties. While the income statement of a company is based on the accrual of income and expenses, the cash flow statement is based on the receipt and payment of cash. A company experiencing high sales growth, depending on the extent of its non-cash working capital, will find that the cash flow from operating activities before the payment of dividends will not grow as quickly as the net profit after taxation. This is because the accrual part included in the net profit after taxation is also growing at a high rate. At such a growth rate, operating activities do not generate sufficient cash to sustain the day-to-day activities of the company.
dc.description.urihttps://sajbm.org/index.php/sajbm/article/view/696
dc.description.versionPublisher's version
dc.format.extent7 pages
dc.identifier.citationSteyn, B. W., Hamman, W. D. & Smit. E. v d M. 2002. The danger of high growth combined with a large non-cash working capital base - a descriptive analysis. South African Journal of Business Management, 33(1):a696, doi:10.4102/sajbm.v33i1.696.
dc.identifier.issn2078-5976 (online)
dc.identifier.issn2078-5585 (print)
dc.identifier.otherdoi:10.4102/sajbm.v33i1.696
dc.identifier.urihttp://hdl.handle.net/10019.1/75165
dc.language.isoen
dc.publisherAOSIS
dc.rights.holderAuthors retain copyright
dc.subjectBusiness enterprisesen_ZA
dc.titleThe danger of high growth combined with a large non-cash working capital base - a descriptive analysisen_ZA
dc.typeArticle
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