The net operating cycle represents the time from using cash to purchase goods or services to collecting cash from the sale of goods or services.

Question

Quizplus · Accepted Answer

The net operating cycle, also known as the cash conversion cycle, measures the time it takes for a company to turn its inventory purchases into cash receipts from customers, effectively capturing the duration from cash outlay for inventory to cash receipt from sales.

The Net Operating Cycle Represents the Time from Using Cash