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Atletico Inc. is a Spanish logistics company considering taking measures to manage its working capital more effectively. However, due to a recent increase in interest
Atletico Inc. is a Spanish logistics company considering taking measures to manage its working capital more effectively. However, due to a recent increase in interest rates, the banks are reluctant to lend money to Atletico's institutional clients, which is why Atletico's inventory is taking longer to sell. To speed up the sale of inventory, Atletico has decided to offer longer collection terms to its debtors.
Considering Atletico's measures, is the firm's liquidity position most likely weakened by "drags" or "pulls" on liquidity?
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