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A question on undercapitalisation

Ujjawal Kumar (11 Points)

15 July 2018

how does excess trading result in undercapitalisation?

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vaishali singh (trainee) (395 Points)
Replied 22 July 2018

an undercapitalized firm means an efficient firm in trade and business.more trading would create more requirement of funds and in case of lack of fund sources in capital structure would take it into undercapitalisation.

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