Answered

At Westonci.ca, we make it easy for you to get the answers you need from a community of knowledgeable individuals. Explore thousands of questions and answers from a knowledgeable community of experts on our user-friendly platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

How would a company's working capital be affected if a substantial amount of accounts payable were paid in cash?

Sagot :

aamirmajeed5100

Answer:

If a company pays most of the major payments through cash it means its cash flow will be reduced due to the company’s working capital will also reduce but the current liabilities will remain unchanged.

Explanation:

Cash flow includes in Current assets of the company and is considered to be the strength of the company's working capital. therefore with the cash payments company's current assets will reduce and this reduction weakens working capital.

For example:

Individual A pays most of the payments through cash and his current assets are being reduced due to that his working capital would also reduce with its cash flow but the liabilities will remain unchanged as they are long-term debt.

Liabilities are of more than a year or about a year due to that they’ll not affect the current assets of the company and this will not affect its working capital.

You can learn more about Economics

at https://brainly.com/question/28179485

#SPJ4

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.