1. 3.

Changes in the operating cycle [LO 18.1] Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease and the letter N for no change:

1. Average receivables goes up.

2. Credit repayment times for customers are increased.

3. Inventory turnover goes from 3 times to 6 times.

4. Payables turnover goes from 6 times to 11 times.

5. Receivables turnover goes from 7 times to 9 times.

6. Payments to suppliers are accelerated.