If a firm is involuntarily "stretching" its accounts payable then this is one sign that it is undercapitalized, that is, that it needs more working capital for operations.

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Stretching accounts payable means delaying payment to suppliers in order to conserve cash. This is often a sign that the firm does not have enough working capital to meet its obligations on time.

If a Firm Is Involuntarily "Stretching" Its Accounts Payable Then