Suppose that the inventory period is 50 days, the accounts payable period is 35 days, and the cash cycle is 55 days. What is the operating cycle?

Question

Quizplus · Accepted Answer

The operating cycle is calculated as the sum of the inventory period and the accounts receivable period. Given the cash cycle is 55 days and the accounts payable period is 35 days, the accounts receivable period is 55 + 35 = 90 days. Therefore, the operating cycle is 50 (inventory period) + 90 (accounts receivable period) = 90 days.

Suppose That the Inventory Period Is 50 Days, the Accounts