Credit level reduction
The reduction in credit level could mean that the company may have revised their credit terms due to improper payments. However, at face value, the credit levels appear to fall within acceptable standards. Confirming any anomalies requires in-depth investigations. The elements of working capital, including account receivables, cash & cash equivalents, and inventory, have experienced a consistent decline. Such could mean that the company may not have acquired a large number of new credit supplies but tried to reduce their current obligations. The decline in working capital that helps in settling the short-term debts, including account payables, suggests a looming problem in clearing their credit obligations. The company business has also declined considerably by the high losses noted in its operations, which indicates that the company may inevitably face insolvency soon if no new strategy helps to salvage the dire situation. Collectively, the working capital of the business needs restructuring to keep the business afloat.