An increase in sales accompanied by an increase in accounts payable will reduce the amount of new external funds required, all else being equal.

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Accounts payable represent unpaid bills for goods or services, so an increase in accounts payable means that a company is purchasing more on credit rather than paying for everything upfront. This means that the company is effectively using the supplier's money to finance its operations, which reduces the amount of new external funds needed. Additionally, an increase in sales means that the company is generating more revenue, which can be used to pay off the accounts payable. Therefore, both factors work together to reduce the need for external financing.

An Increase in Sales Accompanied by an Increase in Accounts