Respuesta :
The term "operating cycle" refers to the typical period it takes for a business to convert cash to inventory, inventory to accounts receivable, and accounts receivable back to cash.
What is a company's operating cycle?
The number of days it takes for a company to receive inventory, sell it, and get paid for it is referred to as an operating cycle (OC). This cycle has a crucial role in defining a company's efficiency.
What is the typical operating cycle length?
The following elements make up the operating cycle: the ratio of inventory turnover to days of sales in inventory (365 days), to the typical amount of time it takes to collect (365 days/accounts receivable turnover ratio)
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The complete question is:
"the average time it takes a business to convert cash to inventory, inventory to accounts receivable, and accounts receivable back to cash is commonly called the _________ cycle.
