The operating cash cycle is measured as:

Question

Quizplus · Accepted Answer

The operating cash cycle is the time it takes from the purchase of inventory to the collection of cash from the sale of goods or services. It is measured by adding the inventory turnover period (the time between the purchase and sale of inventory), the debtors turnover period (the time it takes to collect payment from customers), and subtracting the creditors turnover period (the time it takes to pay suppliers). Therefore, the correct formula is Inventory turnover period + Debtors turnover period - Creditors turnover period, making choice C the best answer.

The Operating Cash Cycle Is Measured As