Define operating cycle and long and short operating cycle? Use of operating cycle? Can someone give me assistance on these questions??   Posted Date: 2/14/2013 12:21:50 AM | Location : United States

Ask an Expert

Definition of Operating Cycle: The operating cycle is the amount of time it takes for a company to turn cash used to buy inventory into cash once again. This number is evaluated by adding the age of inventory (the number of days that inventory is held prior to sale) with the collection period (the number of days needed to collect receivables). A company with a short operating cycle is able to quickly recover its investment. A corporation with a long operating cycle will have less cash available to meet any short-term requirements, which can result in increased borrowing and interest expense. Posted by Tom | Posted Date: 2/14/2013 12:22:27 AM

Related Discussions:- Operating cycle, Assignment Help, Ask Question on Operating cycle, Get Answer, Expert's Help, Operating cycle Discussions

Write discussion on Operating cycle
Your posts are moderated

Write your message here..

Related Questions

Brief on mistakes in linton’s evaluation, Mistakes in Linton's evaluation ... Mistakes in Linton's evaluation (1) The preliminary investment in working capital should be offset by a working capital release in the final year, assuming a constant level of

Review of financial research report, This assignment is an analysis of a U.... This assignment is an analysis of a U.S. publicly-traded company; its common stock could be a prospective investment. The report is due in Week 10, in needs to be at least 5 pages

Difference euronote market and euro medium term note market, What is the di... What is the difference between the Euronote market, the Euro-medium-term-note market, and the Eurocommercial paper market? Answer:  Euronotes are short-term notes guarantees by

What are sources of finance, Q. What are Sources of Finance? No details... Q. What are Sources of Finance? No details are specified concerning the nature of a business to comment on and hence only general recommendations can be made. Given that fixed

Corporate governance features, Corporate Governance features Corporat... Corporate Governance features Corporate compliance: The BOD should make sure that corporation obeys with all related laws, governance practices, regulations, accounting an

Reform in a system, As the meaning of reform in a system, these reforms in ... As the meaning of reform in a system, these reforms in corporate governance would make effective impacts over the process of audit in the context of auditor requirements and the cl

Portfolio management, Portfolio Management: Project Portfolio Manageme... Portfolio Management: Project Portfolio Management (PPM) is the centralized management of processes, technologies and methods used by project management offices (PMOs) and pro

Show the motives of maintaining receivables, Q. Show the Motives of Maintai... Q. Show the Motives of Maintaining Receivables? Motives of Maintaining Receivables :- (i) Sales Growth Motives: - The major objectives of credit sales are to increase the to

How cash budget and capital budget relate to pro forma, Explain how the cas... Explain how the cash budget and the capital budget relate to pro forma financial statements. The cash budget depicts the projected flow of cash in and out of the firm for fixed

Is there an optimal capital structure, Is there an optimal capital structur... Is there an optimal capital structure? What is it and how can it be calculated? There is no optimal capital structure. Capital structure is a variable which depends on the incl