Final answer:
A company with seasonal working capital is not necessarily a deal killer, but it may pose challenges in certain circumstances. The impact of seasonal working capital depends on factors such as the industry and the company's financial management strategies.
Step-by-step explanation:
If a company has seasonal working capital, it is not necessarily a deal killer. Seasonal working capital refers to the fluctuation in a company's working capital needs based on the time of year or business cycles.
Many industries, such as retail, agriculture, and tourism, experience seasonal fluctuations and have adapted their operations accordingly. It is important for companies with seasonal working capital to manage their finances effectively, such as by budgeting for off-seasons and securing lines of credit to bridge the gap.
It is crucial to note that while seasonal working capital is not a deal killer, it may pose challenges in certain circumstances.
For example, some industries may experience more severe fluctuations than others, making it difficult for companies without proper financial planning to survive during lean times.
Additionally, lenders or investors may be more cautious when considering businesses with extreme or unpredictable seasonal working capital needs.
In conclusion, the impact of seasonal working capital on a company's viability depends on various factors, including the industry and the company's financial management strategies.
It is essential for businesses to understand their unique working capital requirements and implement effective strategies to navigate through peak and off-peak periods in order to thrive.