Question
A toy store does not pay for its purchases of toys from manufacturers until one month later. Suppose that in October it starts to stock
A toy store does not pay for its purchases of toys from manufacturers until one month later. Suppose that in October it starts to stock up in anticipation of a surge in toy sales in December, when is it most likely to have a negative operating cash flow?
Group of answer choices
A. It should never have a negative operating cash flow as long as its business is profitable.
B. In November because this is when it will need to pay for the increased inventory.
C. In October because this is when it starts to stock up.
D. In December because this is when the toys will start to move off the shelves.
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