The statement of cash flows shows how there are changes of cash flow in the company and where they come from. It shows increases and decreases in such items as accounts receivables, accounts payables, inventory, investment changes. An increase in the company’s accounts payable from one period to the next means that there has to be high cash balances in to support the accounts payable increase. Slowing payments to suppliers for the sake of increasing the company’s bank balances would be an ethical decision to make. The companies that are waiting for your payment are relying on you to make that payment. Holding it back may hurt their cash balances in turn. The right decision to make would be to not slow payments to suppliers.

Rosita

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