Question

To efficiently manage its working capital, da pharma inc. has an arrangement with its suppliers of raw materials, packaging material, and machinery. these suppliers allow da pharma inc. to buy the required goods and services and pay for them at a later date or in installments. in this scenario, da pharma inc. has obtained funding in the form of _____.

Answer 1

The company has obtained funding in the form of trade credit. This is a common method for many companies. It is credit that is extended to a company by its suppliers. The suppliers let the company take ownership of the items immediately without payment knowing that they will bill the company and be paid later.