Slowing cash payments to vendors is known as stretching payables or leaning on t

Question

Slowing cash payments to vendors is known as stretching payables or leaning on the trade.Discuss the potential advantages and disadvantages of stretching payables.

Explanation / Answer

ADV-->It might be worth noting that stretching out your payables is a key advantage of size. The bigger you are, the harder you can squeeze the little guys who depend on you. It is also one of the only ways for companies with cash flow problems to stay in business. (Just between you and me, even entities within public broadcasting have done what you describe.)

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