An increase in the weighted average collection period indicates that customers are taking longer to pay their outstanding accounts. This represents a drag on the company’s liquidity. A vendor that changes its payment terms from “net 30" to "net 60” is allowing the company 60 days to pay instead of 30. This extension of trade credit is a source of liquidity for the company. An inventory turnover ratio that is increasing relative to the industry average is a sign of good inventory management, which can also be a source of liquidity for a company.