The increase of ap on the statement of cashflow shows?

Answer 1

An increase in Accounts Payable (AP) on the statement of cash flows indicates that a company is delaying payments to its suppliers, which can signify improved cash flow management or a liquidity squeeze. This increase adds to cash flow from operating activities, as it represents cash that has not yet been spent. However, while a higher AP can be beneficial in the short term, it may also lead to strained supplier relationships if not managed properly. Overall, it reflects the company's operational efficiency and cash management strategies.