Video narration
A business can make a profit and still run out of cash. How? Timing. It pays for materials and wages long before customers pay it. Say Gunaditya runs a factory. Suppliers give him thirty days. Goods sit in stock forty five days. Customers take sixty days to pay. He pays on day thirty, but cash returns on day one hundred and five. Seventy five days to fund. And growth makes it worse. Bigger orders mean more stock and more unpaid invoices first. So corporate banks bridge the gap with overdrafts, credit lines and cash advanced against invoices. Profit is sanity. Cash is reality. Follow Malla Banking Academy for one banking idea a day.