Westmills Carpet was profitable on paper, but cash told a different story. Rising input costs, long receivable cycles, and customer concentration quietly strained liquidity, pushing the firm toward a breaking point despite stable demand. With limited time, the analysis traced how working capital decisions, pricing discipline, and financing structure interacted under stress. The case forced a choice between short term survival and long term value erosion. The recommendation centered on restoring cash flow visibility through tighter credit control, pricing adjustments, and operational discipline, concluding that liquidity, not profitability, ultimately determines whether a business survives its growth phase.
