HomeworkLib
Question

20. A firm has high cash payments to its suppliers but low account payables. As a financial analyst, your likely conclusion i
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer:

A firm is paying cash paying to their suppliers therefore company has low account payables. It means company generally is paying cash to suppliers for their goods instead of purchase on credit.

For ex: If company A is buying products from B and paying thier dues in cash. It will lead to less account payables. This will effect the working capital of the firm. In this case, company A should utilize the credit terms of supplier to slow the cash payments and effectively manage the working capital to improve the cash. It will help to service all other liabilities and working capital cycle will improve.

0 0
Add a comment
Know the answer?
Add Answer to:
20. A firm has high cash payments to its suppliers but low account payables. As a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Firm B High Price Low Price High Price A:8 B:8 A;3 B:20 Low Price A:20 B:3...

    Firm B High Price Low Price High Price A:8 B:8 A;3 B:20 Low Price A:20 B:3 A:6 B:6 *Firm A on Left, Firm B on top - What is the PV of profits if the firms collude successfully assuming an interest rate of 15%? - What is PV of profits for Firm A if it defects from the collusive behavior assuming an interest rate of 15%?

  • Blanca (a U.S. firm) has no subsidiaries and presently has sales to Mexican customers amounting to...

    Blanca (a U.S. firm) has no subsidiaries and presently has sales to Mexican customers amounting to MXP98 million, while its peso‑denomin­ated expenses amount to MXP61 million. If it shifts its material orders from its Mexican suppliers to U.S. suppliers, it could reduce peso‑denominated expenses by MXP19 million and increase dollar‑denominated expenses by $1,800,000. This strategy would _______ the Blanca’s exposure to changes in the peso’s movements against the U.S. dollar. Regardless of whether the firm shifts expenses, it is likely...

  • You are negotiating with another firm to become one of its suppliers. What types of promises migh...

    You are negotiating with another firm to become one of its suppliers. What types of promises might you make to the other negotiating team? How could you enhance the credibility of your promises? (Check alf that apply) A. You could promise to offer a product at a low price. You could show your commitment to offering a low price by increasing production capacity to lower your marginal cost. B. You could promise to offer a product at a high level...

  • You are negotiating with another firm to become one of its suppliers. What types of promises...

    You are negotiating with another firm to become one of its suppliers. What types of promises might you make to the other negotiating​ team? How could you enhance the credibility of your​ promises? (Check all that apply.​) A. You could promise to offer a product at a high level of quality. You could show your commitment to offering a high level of quality by investing in a new production technology. B. You could promise to offer a product at a...

  • When a firm with an extremely high price/earnings ratio purchases a firm with a very low...

    When a firm with an extremely high price/earnings ratio purchases a firm with a very low price/ earnings ratio in an exchange of stock, its earnings per share will increase. Do you think firms are more likely to acquire other firms when it results in an increase in their earnings per share? Is it beneficial to shareholders to initiate a takeover for these reasons?

  • Exhibit 10-6 Two-Firm Payoff Matrix Ajax Company High price Low price $00 bilion $20 bilion $60...

    Exhibit 10-6 Two-Firm Payoff Matrix Ajax Company High price Low price $00 bilion $20 bilion $60 bilion $10 bilion $10 bilion $20 bilion $20 bilion $20 bilon Suppose costs are identical for the two firms in Exhibit 10- 6. Each firm assumes without formal agreement that if it sets the high price its rival will not charge a lower price. Under these "tit-for-tat" conditions, equilibrium will be established by: Widget Co. charging the high price and Ajax Co. charging the...

  • Suppose that a certain country has a current account surplus in its balance of payments. Does...

    Suppose that a certain country has a current account surplus in its balance of payments. Does this mean that the country will necessarily have a financial account deficit? Explain why or why not.

  • 1. Dividend policy A firm’s value depends on its expected free cash flow and its cost...

    1. Dividend policy A firm’s value depends on its expected free cash flow and its cost of capital. Distributions made in the form of dividends or stock repurchases impact the firm’s value and the investors in different ways. Some analysts have argued that a firm’s value should solely be determined by its basic earning power and the business risk of the firm. Which of these concepts would support these analysts’ argument? A. The signaling hypothesis B. Dividend irrelevance theory C....

  • A firm has the following financial statement info: Sales $        6,000,000 COGS $        5,400,000 Cash $         &nb

    A firm has the following financial statement info: Sales $        6,000,000 COGS $        5,400,000 Cash $              50,000 Inv $            550,000 AR $            390,000 AP $            450,000 Accruals $              60,000 NP $            400,000 For each question, round to 2 decimals. What is the length of its inventory conversion period?    What is the length of its average collection period? What is the length of its payables deferral period? What is the length of its cash conversion cycle?

  • Å firm in the consolidation stage of its industry life cycle will likely have low rates...

    Å firm in the consolidation stage of its industry life cycle will likely have low rates of investment high R&D spending low dividend payout rates high profit margins Question 54 (Mandatory) (1 point) Which of the following are barriers to entry? I. Large economies of scale required to be profitable II. Established brand loyalty III. Patent protection for the firm's product IV. Rapid industry growth

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT