The cash cycle is equal to:

Question

Quizplus · Accepted Answer

The cash cycle is the time between when the company pays for goods and services and when it receives payment for its own goods and services. It is calculated as the sum of the inventory period (time between buying raw materials and selling finished goods), the accounts receivable period (time between selling goods and receiving payment), and the accounts payable period (time between buying goods and paying for them). Therefore, option C, which adds the inventory period to the difference between accounts receivable and accounts payable periods, is the correct choice.

The Cash Cycle Is Equal To