12 Operating and Cash Cycles What impact did this change in payables policy have on Power Assets' operating cycle? Its cash cycle? Operating and Cash Cycles What impact do you think the policy change had on Power Assets' suppliers? Corporate Ethics Is it ethical for large firms to unilaterally lengthen their payable periods, particularly when dealing with smaller suppliers? Is an 82-day payables period necessarily bad? Explain. Payables Period Why do you think Power Assets really reduced their payables period? Is their explanation that it would 'control costs and optimize cash flow' sensible? Explain Payables Period Will there be any direct or indirect cash benefits to Power Assets from the change in payables period? Explain Changes in the Cash Account Indicate the impact of the following corporate actions on cash, using the letter I for an increase, D for a decrease, or N when no change occurs. (a) A dividend is paid with funds received from a sale of debt. (b) Property is purchased and paid for with short-term debt. (c) Inventory is bought on credit. 13 14 15 16 17 12 Operating and Cash Cycles What impact did this change in payables policy have on Power Assets' operating cycle? Its cash cycle? Operating and Cash Cycles What impact do you think the policy change had on Power Assets' suppliers? Corporate Ethics Is it ethical for large firms to unilaterally lengthen their payable periods, particularly when dealing with smaller suppliers? Is an 82-day payables period necessarily bad? Explain. Payables Period Why do you think Power Assets really reduced their payables period? Is their explanation that it would 'control costs and optimize cash flow' sensible? Explain Payables Period Will there be any direct or indirect cash benefits to Power Assets from the change in payables period? Explain Changes in the Cash Account Indicate the impact of the following corporate actions on cash, using the letter I for an increase, D for a decrease, or N when no change occurs. (a) A dividend is paid with funds received from a sale of debt. (b) Property is purchased and paid for with short-term debt. (c) Inventory is bought on credit. 13 14 15 16 17