Days of sales in inventory + Days sales outstanding is best described as the:
A) operating cycle.
B) cash conversion cycle.
C) average collection period.
D) number of days of inventory.

Question

Quizplus · Accepted Answer

The operating cycle is the sum of days of sales in inventory (how long inventory is held before it's sold) and days sales outstanding (how long it takes for a company to collect payment after a sale has been made).

Days of Sales in Inventory + Days Sales Outstanding Is