Accruals are "free" financing in the sense that no explicit interest is paid on accruals.

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Accruals are essentially funds that a company owes but hasn't yet paid out, such as wages or utilities. They are considered a form of financing because the company can use these funds for other purposes until they are due to be paid out. However, unlike a loan or bond, accruals do not come with an explicit interest rate that must be paid back.

Accruals Are "Free" Financing in the Sense That No Explicit