kye
0450-20-M-J-11-1e
chloe
TOPIC QUESTION - PAPER 1
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chloe
October 21, 2025 at 7:32:27 AM
May/June 2022
Version 3
5.0 Financial Information and Decisions
5.2 Cash-Flow Forecasting and Working Capital
YOUR ANSWER
Delaying payments to suppliers can help Kara to first receive payments from retailers before paying suppliers. This can help Kara to sort out accounts payables and pay suppliers after cash inflows.
However, if Kara delays payments for too long, suppliers may refuse to supply to Kara in the future because they know that Kara doesn’t have enough money to pay the suppliers. This means that Kara seems unreliable to supply raw materials to.
I think that delaying payments to suppliers may not be the best way to improve cash flow because Kara may find it hard to find suppliers if she keep delaying payments.
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