Frequently asked questions
What is the meaning of undercapitalization?
Undercapitalization happens when a company doesn’t have enough capital to run operations and grow.
What is the disadvantage of undercapitalization?
The disadvantage of undercapitalization is that it limits a company`s ability to invest in growth, meet financial obligations, and maintain smooth operations, potentially leading to business failure.
Is undercapitalization the lack of funding to operate a business?
Yes, undercapitalization means not having enough money to run and grow a business effectively.