The chief executive officer (CFO) of a manufacturing company that is facing a se

Question

The chief executive officer (CFO) of a manufacturing company that is facing a severe cash crunch has a variety of working capital management tools available to address the crisis. These could include any combination of new accounts receivable, accounts payable, inventory, or cash management strategies. One popular strategy is to simply stop paying the bills altogether. Discuss the ethics of this practice. If you were the CFO of this company, how might you go about implementing the strategy of not paying bills?

Explanation / Answer

strategy of not paying bills may give cash for short run but not for long run.this strategy will have a very bad impact on company's goodwill.suppliers will not supply good if they are not paid.

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