When a firm fails financially, this is often due to the problem of overcapitalization.
When a company is overcapitalized, it means that they started off with a lot of investment from their owners. Some might think this is a good thing, but it is usually bad.
The reason it is bad for a firm is that it might lead to them setting goals that are too ambitious for a young firm and so they end of going through financial failure for being unable to meet target.
Find out more on overcapitalization at https://brainly.com/question/14728469
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