If a company takes longer to pay its suppliers than before, all other things being equal, this means that suppliers are providing more financing for the company.

Question

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If a company takes longer to pay its suppliers, it means the suppliers are essentially providing an interest-free loan to the company by allowing them to hold onto their money for a longer period of time. This means the suppliers are providing more financing for the company, as they are essentially extending credit to the company by delaying payment.

If a Company Takes Longer to Pay Its Suppliers Than