The cash operating cycle is equal to (1) days accounts payable outstanding minus (2) days sales outstanding minus (3) days inventory on hand.

Question

Quizplus · Accepted Answer

The cash operating cycle is the time it takes for a company to convert its inventory into cash. It is calculated by adding the days sales outstanding (DSO) to the days inventory on hand (DIO) and then subtracting the days accounts payable outstanding (DPO).

The Cash Operating Cycle Is Equal to (1) Days Accounts