Groupon’s Financial Situation May Mean Trouble
Cue the panic: Groupon is running low on money and could be on a fast-track to financial disaster. Business Insider says the company will be okay as long as it remains in the black until its IPO, but that Groupon owes merchants $392 million and only has $225 million cash to work with. Further, Groupon owes $680 million but only has a total of $376 million in assets.
The numbers add up to a “working capital deficit” and while it’s okay for now, the moment it runs out of cash, there will be problems. Groupon will survive if the company’s rate of growth is sustained through its IPO.