The August 31, 2009, issue of the Wall Street Journal includes an article by Serena Ng and Cari Tuna entitled “Big Firms Are Quick to Collect, Slow to Pay.”

Instructions

Read the article and answer the following questions.

(a) How many days did InBev tell its suppliers that it was going to take to pay? How many days did it take previously?

(b) What steps did General Electric take to free up cash? How much cash did it free up?

(c) On average, how many days did companies with more than $5 billion take to pay suppliers, and how many days did they take to collect from their customers? How did this compare to companies with less than $500 million in sales?

(d) Are there any risks involved with being too tough in negotiating delayed payment terms with suppliers?