In: Finance
In the current recessionary environment, equity investors reward firms with high free cash flows. If you are a CFO trying to boost your firm’s stock price, which measure is likely to increase FCF of the firm?
a. |
Offer buyers more time to pay for their purchases (increasing account receivables) |
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b. |
Adopt a schedule to reduce the pace of depreciation of the firm’s assets |
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c. |
Increase inventories |
|
d. |
Ask suppliers to increase the period to pay for the purchase of raw materials and inputs |
d.
Ask suppliers to increase the period to pay for the purchase of raw materials and inputs
because it raises liabilities which is positive for FCFF