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22. A firm can finance its operations on the backs of its suppliers by taking longer...

22. A firm can finance its operations on the backs of its suppliers by taking longer to pay its bills.

T or F

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Answer #1

True

The firm can finance its operations on the backs of its suppliers by taking longer to pay its bills, The Term is known as Days Payable Outstanding, The firm can use the avaialble balance of cash for the working capital and meet short term liabilities. It helps the company to take the advantage of that cash and gain maximum utility.

However, This condition is not always rewarding as it can dampen the reputation of the company because it will take longer time to pay the creditors.

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