Trade discounts can help a company's cash flow at the expense of earnings and may very well be a good tradeoff.

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Trade discounts can improve a company's cash flow by allowing it to pay less for its purchases, thereby conserving cash. However, this benefit might come at the expense of earnings since the cost of goods sold may not reduce proportionately, affecting the profit margins. Despite this, the improvement in cash flow can be a valuable tradeoff for the company, especially in scenarios where maintaining liquidity is crucial.

Trade Discounts Can Help a Company's Cash Flow at the Expense