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Failing Businesses: Pledging

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Pledging seems like a last chance effort to save your business. Shouldn't a business owner really consider profit margins before using this technique? What is the point if at the end of the month, the 10% that is paid out gives you a negative profit margin?

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Solution Summary

This solution explains why companies that are doing poorly will resort to pledging.

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Although considering profit margin is important, there are more types of financial statistics to consider because any financial analyst would consider more than one statistic before making a decision. With pledging, the collateral or asset used could be confiscated at the end of the month, however, that ...

Solution provided by:
Keonda Grant-Taylor, MBA
Education
  • Doctorate of Management in Organizational Leadership, University of Phoenix - Online
  • MBA, Webster Univeristy
  • Dual BS Degrees, University of South Carolina
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