Dallas and More (D&M)sells its inventory in 87 days on average.Its average customer charges their purchase on a credit card whereby payment is received in ten days.On the other hand,D&M takes 56 days on average to pay for its purchases.Given this information,what is the length of D&M's operating cycle?

Question

Quizplus · Accepted Answer

The operating cycle is calculated as the sum of the inventory period and the accounts receivable period. Here, it is 87 days (inventory period) + 10 days (accounts receivable period) = 97 days.

Dallas and More (D&M)sells Its Inventory in 87 Days on Average.Its