Which key financial ratio is defined as the estimate of the number of days from the time a company purchases inventory, sells it, and collects the receivable?
A) Inventory turnover.
B) Accounts receivable turnover.
C) Gross operating cycle.
D) Net operating cycle.
E) Accounts payable turnover.

Question

Quizplus · Accepted Answer

The Gross Operating Cycle (GOC) is the correct answer because it measures the time from when a company purchases inventory to when it collects receivables from the sale of that inventory, encompassing the entire process of inventory management, sales, and collection.

Which Key Financial Ratio Is Defined as the Estimate of the Number