hard · Investment Banking
If a company increases its Accounts Payable Days (DPO) from 30 to 45, what is the immediate impact on its Unlevered Free Cash Flow (UFCF)?
- UFCF increases because the company is delaying cash outflows, creating a source of cash.
- UFCF decreases because higher payables indicate a worsening credit profile.
- There is no impact, as UFCF is an EBIT-based metric that excludes working capital.
- UFCF decreases because the company has more liabilities on its balance sheet.
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