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Basic Question 7 of 22
When a firm starts to use the technique of payables financing, the operating cash flow will ______.
B. become higher
C. not change
A. become lower
B. become higher
C. not change
User Contributed Comments 7
| User | Comment |
|---|---|
| jmcarr02 | Well, it has no effect if the firm uses this technique continuously. |
| chris12345 | When a firm STARTS to use......... |
| cslau83 | lower OCF only when reclassify in the corresponding period. IN 1st period OCF still increase. |
| moneyguy | although, cash flows themselves remained unchanged. |
| johntan1979 | Increase in a/p increases CFO. Hence, decrease lowers CFO. |
| carlo_it | bank will make a payment for the firm. i.e. |
| Ewan2015 | Wait why is it not higher? Payment of suppliers is a cash outflow so I should have a higher net cash flow from operations? |
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Learning Outcome Statements
describe presentation choices, including non-GAAP measures, that could be used to influence an analyst's opinion
describe accounting methods (choices and estimates) that could be used to manage earnings, cash flow, and balance sheet items
describe accounting warning signs and methods for detecting manipulation of information in financial reports
CFA® 2024 Level I Curriculum, Volume 3, Module 10.