Operating cycle, Financial Management

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





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
Related Questions
Balance Sheets Peony Ltd. Aster Ltd. Assets: Cash $ 62,500 $ 25,000 Accounts receivable 187,500 200,000 Inventori

Issuance of securities  : Security issues by companies are a novel and common way of raising funds that in turn help realize their growth aspirations. It is therefore necessary

Regulatory Aspect Employees Provident Fund Organization (EPFO) is under the Ministry of Labor and is a primary organization for retirement income for private employees in India

Q. What do you mean by Time value of money ? The concept of TVM refers to the fact that the money received today is different in its worth from the money receivable at some oth

Question 1: (a) Discuss the main limitations of using changes in national income as an index of economic welfare. (b) What are the alternatives measures and issues that sho

Mutual funds Mutual funds pool resources from a lot of individuals and companies and invest these resources in diversified portfolios of bonds, stocks and money market instrume

Q. Show the Accounting Profit Criteria? Accounting Profit Criteria: - Under accounting profit criteria there is merely one method for making capital expenditure decisions. This

Types of Mortgages 1. Traditional Mortgages 2. Non -  Traditional Mortgages 3.  Graduated-Payment Mortgages (GPMs) 4.  Pledged-Account Mortg

Provide three examples of mutually exclusive projects. Mutually elite projects are projects that compete against each other for our selection.  If a firm were considering the b

Question 1 Under a hire purchase deal structured by X Finance Ltd. for Y Corporation, the finance company has offered to finance the purchase of equipment that costs Rs. 200 la