What does an increase in accounts payable indicate about a company's cash flow?

An increase in accounts payable indicates that a company is conserving cash. When a company extends the time it takes to pay its suppliers, it effectively retains cash that can be used for other operational needs or investments. This delay in payment allows the company to manage its working capital more efficiently and can improve cash flow.

By telling creditors that they will pay later, the company can hold onto its cash for longer periods. This strategy can be beneficial for managing liquidity, especially during times when cash flow might be tight. An increase in accounts payable is generally viewed as a positive sign in terms of cash management, provided that the company can meet its obligations without damaging relationships with suppliers or incurring late fees.

In contrast, the other options do not accurately reflect the dynamics of accounts payable. For instance, paying creditors faster would decrease accounts payable rather than increase it, and increased revenue does not directly correlate to accounts payable. Fulfilling obligations typically suggests timely payments rather than delays, which would not lead to an increase in accounts payable.