Which one of the following will decrease the operating cycle?
A)Decreasing the days sales in inventory.
B)Decreasing the days in trade payables.
C)Decreasing the cash cycle by increasing the trade payables period.
D)Decreasing the trade receivables turnover rate.
E)Decreasing the speed at which inventory is sold.

Question

Quizplus · Accepted Answer

Decreasing the days sales in inventory means that the company is selling its inventory faster, which reduces the time inventory is held and thus decreases the operating cycle.

Which One of the Following Will Decrease the Operating Cycle