If a company has an excess of cash what are the advantages and disadvantages of paying its suppliers more quikly or reducing the companies outstanding debts?© BrainMass Inc. brainmass.com October 9, 2019, 6:06 pm ad1c9bdddf
Some one has excess cash, it can pay its suppliers and avail the cash discount. It can also reduce the debts and save interest cost. Thus the advantage is that it will improve the profits.
The disadvantage is that this excess cash can also be utilized in the business opportunity. One has to compare the returns in both that is whether to pay ...
This discusses the strategies of optimally utilizing the cash.