If the credit period increases from 45 days to 60 days it will result in

When credit period is extended debtors take longer to pay. This delays cash inflow and blocks company funds. While it may increase sales due to lenient credit policy it also increases risk of bad debts. Blocking of funds affects liquidity and may force the company to borrow money. Effective credit management is necessary to balance sales growth and cash flow. For example many companies set strict credit control systems to avoid blocked funds.