CFA Practice Question

There are 90 practice questions for this study session.

CFA Practice Question

How does increasing the measure of days sales in payables (DSP) affect operating and financing cash flows?

Operating | Financing
A. Increase | No impact
B. No impact | Increase
C. Decrease | Increase
Explanation: A larger DSP will increase operating cash flow.

User Contributed Comments 4

User Comment
mickys can someone clari?
Profache Increasing the DSP delays payment to suppliers, which increases operating cash flow. Payment to suppliers (accounts payable) is an operating activity, not financing.
birdperson basically, increase A/P --> increases CFO
birdperson and I should add, no impact to CFF
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