All firms do not increase payable period to shorten cash cycle. Payable Period: The time period starts when the company purchase raw material from supplier and pay cash back to the supplier this time period is the payable period. Generally large companies lengthen payable period to get the benefit of cash.

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Chapter 26, Problem 11CQ

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To explain: All firms do not increase payable period to shorten cash cycle.

Payable Period:

The time period starts when the company purchase raw material from supplier and pay cash back to the supplier this time period is the payable period. Generally large companies lengthen payable period to get the benefit of cash.

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