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a. Having low amount of working capital b. High turnover of working capital c. Sales are less compared to assets employed d. Assets are less compared to sales generated e. Low turnover of working capital
C). under employment of assets
Sales are less compared to working capital because the discount margin is high
Under Trading Means:
A firm which is under capitalized will try to do too much with the limited amount of capital which it has. For example it may not maintain proper stock of stock. Also it may not extend much credit to customers and may insist only on cash basis sales. It may also not pay the creditors on time.
