Changes in Cycles indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change:
a. The terms of cash discounts offered to customers are made less favorable.
b. The cash discounts offered by supplies are decreased; thus, payments are made earlier.
c. An increased number of customers begin to pay in cash instead of with credit.
d. Fewer raw materials than usual are purchased.
e. A greater percentage of raw material purchases are paid for with credit.
f. More finished goods are produced for inventory instead of for order.




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May 9, 2011

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