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JC Penney Fudged Numbers to Improve Cash Position Says Analyst

JC Penney may have delayed vendor payments in order to improve its cash position.

The struggling retailer, which just reported an enormous Q4 loss, had a bright spot in its most recent investor report – despite huge losses, the company is still sitting on almost a billion dollars in cash. But there are rumors floating around Wall Street Morgan Stanley that the company deferred the payments to vendors to make it look healthier than it actually is.

Morgan Stanley notes that JC Penney’s inventory dropped 20% from 2011, but accounts payable rose 14%. This raised eyebrows because inventory normally tracks closely with accounts payable.