level of accounts receivable and inventories, or by increasing the level of accounts payable. REQUIRED a. Develop a list of suggested actions to achieve all three of these objectives as manager. b. Examine the implications of each. That is, describe the marketing implications of reducing receivables and inventories, and the supplier implications of delaying payment. How can al company achieve working capital reduction without negatively impacting its performance? C5.49. Ethics and Governance: Earnings Management Companies are aware that analysts focus on profitability in evaluating financial performance. Managers have historically utilized a number of methods to improve reported profitability that are cosmetic in nature and do not affect "real operating performance. These are typically subsumed under the general heading of "earnings management." Justification for such actions typically in- cludes the following arguments: Increasing stock price by managing earnings benefits shareholders; thus, no one is hurt by these actions. Earnings management is a temporary fix; such actions will be curtailed once "real" profitabil- ity improves, as managers expect. REQUIRED a. Identify the affected parties in any scheme to manage profits to prop up stock price. b. Do the ends (of earnings management) justify the means? Explain. c. To what extent are the objectives of managers different from those of shareholders? d. What governance structure can you envision that might prohibit earnings management