What are the Consequences of Mismanaging Liabilities?
Failure to manage liabilities effectively can lead to several adverse outcomes, such as:
Bankruptcy: Inability to meet debt obligations can lead to insolvency and potential bankruptcy. Legal Issues: Creditors may take legal action to recover debts, leading to additional costs and potential asset seizures. Credit Rating: Poor management of liabilities can negatively impact the business’s credit rating, making it difficult to obtain financing in the future. Operational Disruptions: Excessive debt can strain cash flow, affecting day-to-day operations and growth opportunities.