Match the words with the term.
-When does cash flow increase?
A) when inventories are reduced
B) when trade receivables are increased
C) when revenue is reduced
D) when non-current assets are purchased

Question

Quizplus · Accepted Answer

Reducing inventories means a company is using up stock that has already been paid for, rather than purchasing more. This action does not immediately involve an outflow of cash, and can actually free up cash that was previously tied up in inventory, effectively increasing cash flow.

Match the Words with the Term