Dear sir,
in addition to previous question "if i use an accrual base of accounting and have lots of receivables that may be received in the next year, and have paid to lots of suppliers that were relate to last year?” means that my performance was good during the year,but paid more and received nothing. so statements of cash flows will show my performance good as I am or poor?
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Accrual base and Cash flow statements
9y ago
9y ago#1It looks to me that you need lessons in working capital management!
It's a more 'normal' practice to take longer to pay suppliers that you allow receivables time to pay
In that way your suppliers are financing the credit period that you are allowing to your customers
"so statements of cash flows will show my performance good as I am or poor?" - it depends entirely on your attitude and strategy. If it is the case that you want to pay suppliers early and that you want to allow your customers extended credit then, yes, you appear to be hitting your targets so presumably that means your performance is exactly as you intended
OK?
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