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What is the cash benefit to bluesky from this change

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Question - Last month, Bluesky announced that it would stretch out its bill payments from 30days to 45days. The reason given was that the company wanted to "control costs and optimize cash flow". The increased payables will be in effect for all of the company's 4,000 suppliers.

Required -

a) Why don't all firms simply increase their payables period to shorten their cash cycles?

b) Bluesky lengthened its payables period to "control costs and optimize cash flow". Exactly what is the cash benefit to Bluesky from this change?

Reference no: EM133079039

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