The company you work for has agreed to pay a vendor for inventory received in 30 days. The cash needed to pay for the inventory plus operating expenses for the next 30 days usually comes from collections on accounts receivable. You have just been informed by a customer that he will not be able to pay his balance due for 60 days. This will mean that you will not have the cash available to pay for both your inventory and your operating expenses. What would you do in this situation? Why would you choose that solution? How would your solution help and/or hurt your business going forward?
In response to this question, I have two thoughts. 1) I do not see it as being a viable option to have to choose paying for inventory over paying for operating expenses. Lets say you choose to pay for your inventory, but can't pay your operating expenses. What good is having inventory if you are not able to pay the rent or the utilities on the warehouse that is being used to store that inventory? Conversely, what good is paying ...