Reading 34: Understanding the Cash Flow Statement LOSg习题精选 2010, activities, statements, financing, interpret

honeycfa

LOS g: Analyze and interpret a cash flow statement using both total currency amounts and common-size cash flow statements.

How does decreasing accounts payable turnover affect a company’s cash flow from financing activities and is this source of cash sustainable?

Financing cash flow

Sustainable source

A) Increase No

B) No impact No

C) No impact Yes

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Decreasing accounts payable turnover saves cash by delaying payments to suppliers. The result is an operating source of cash, not a financing source. Decreasing accounts payable turnover is not a sustainable source of cash flow because suppliers will refuse to extend credit, at some point, if payment is slower and slower.

 

[此贴子已经被作者于2010-4-19 13:39:44编辑过]

shxjm

thanks