Ahh, the dreaded Cash Conversion Cycle (or "Succeeding yourself to death") I'm a wearable device founder, and it's AMAZING watching how often this happens to my hardware friends. Especially once they begin raising serious amounts of capital.

I had a friend who got into Walmart -- he was ECSTATIC. His product was a smart electronics product, and quickly shot up to being a heavy seller.

It sold so well---that he was bankrupt within six months.

Why? Because he paid his supplier upfront. Walmart didn't pay him until 60 or 90 days after sell-through. After the first run, Walmart wanted more, his P&L (accrual) showed profit, so he took a loan. Then another. Then suddenly he couldn't get any more loans. And he couldn't get a hold of product. And because of his fixed costs, there was no way to future payables could save him.

So common, and no one seems to know about it.