Why do profitable firms become insolvent?

6 February 2014

Great video by MoneyWeek from two years or so back but it is still very much relevant. Tim Bennett explains in simple terms how a 'profitable' company can run out of cash and become insolvent, as well as how overtrading affects working capital.  Although it is made with an investor in mind, it very useful information for directors to identify the warning signs themselves before it's too late.