On average, Stuff for Less is able to sell their inventory in 23 days. Stuff for Less takes 60 days on average to pay for their purchases. On the other hand, their average customer charges their
Purchase on a credit card whereby payment is received in 15 days. Given this information, what is
The length of operating cycle?

Question

Quizplus · Accepted Answer

The operating cycle is calculated as the sum of the inventory period and the receivables period. Here, the inventory period is 23 days and the receivables period is 15 days, so the operating cycle is 23 + 15 = 38 days.

On Average, Stuff for Less Is Able to Sell Their