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    Liquidity of Short term assets; related to debt

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    It is proposed at a stockholders' meeting that the firm slow its rate of payments on accounts payable in order to make more funds available for operations. It is contended that this procedure will enable the firm to expand inventory, which will in turn enable the firm to generate more sales. Comment on this propsosal.

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    Slowing down the rate of the payments, can inmprove the cash flow position as there will reduction in the working capital investment. For this in order to improve cash flow position we have to improve long term relations ...

    Solution Summary

    This discusses the factors of Liquidity of Short term assets; related to debt paying ability