Which of the following will increase the additional funds needed from external sources?
A) The firm's profit margin increases.
B) The firm's sales forecast is decreased.
C) The firm reduces its usage of trade credit.
D) The firm's retention ratio is increased.

Question

Quizplus · Accepted Answer

Reducing the use of trade credit means the firm is decreasing its accounts payable or short-term borrowing, which in turn increases the need for additional funds from external sources to finance its operations or growth.

Which of the Following Will Increase the Additional Funds Needed