The inventory turnover for the Sneeky Company is 8 times and its day's sales outstanding is 55. What is the operating cycle for Sneeky given a 365-day year.
A) 63.00
B) 6.86
C) 100.63
D) 46.98

Question

Quizplus · Accepted Answer

The operating cycle is the sum of the inventory period and the receivables period. The inventory turnover of 8 times means the inventory period is 365/8 = 45.625 days. The day's sales outstanding is 55 days, which is the receivables period. Therefore, the operating cycle is 45.625 + 55 = 100.625 days, rounded to 100.63.

The Inventory Turnover for the Sneeky Company Is 8 Times