What is most likely to occur if a firm over-invests in net working capital?

If a firm over-invests in net working capital, it may face liquidity issues due to excessive funds tied up in inventory or receivables, reducing cash flow available for other operations. This can lead to inefficiencies and increased carrying costs, ultimately harming profitability. Additionally, the firm may miss out on investment opportunities or struggle to meet short-term obligations, which can negatively impact its overall financial health.