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What is operating cycle?

Answers were Sorted based on User's Feedback



What is operating cycle?..

Answer / gurdeep singh

It is the time period involved in the conversion of raw
material/resources into finished goods or services
including the credit period involved for selling
products/services.
In simple language……. let me give you an extreme example
Suppose a business buy raw material on 1st jan and it takes
one month to convert this raw material into finished goods.
On 1st feb good are ready for sale i.e. stocked at
warehouse on 1st march goods are sold and on 1st april
payment is received. Now this revenue will be used to buy
fresh raw material.
The Operating cycle is 3 months….. The time taken to
convert Working capital into revenue.
Correct me if I m wrong ……………….

Is This Answer Correct ?    63 Yes 8 No

What is operating cycle?..

Answer / rajani

The average time between purchasing or acquiring inventory
and receiving cash proceeds from its sale.

Is This Answer Correct ?    24 Yes 2 No

What is operating cycle?..

Answer / ramu

raw material - work in progress - finished goods - sale of
the goods - cash - raw material

Is This Answer Correct ?    31 Yes 12 No

What is operating cycle?..

Answer / n.vanitha

OPERATING CYCLE STRAT WITH CASH ENDS WITH CASH I.E IT START
RAW MATERIAL WITH THE CASH
CASH-RAW MATERIAL-WORKING PROGRESS-FINISHED GOODS-SALES-
DEBTORS-CASH.IT IS OPERATING CYCLE

Is This Answer Correct ?    8 Yes 3 No

What is operating cycle?..

Answer / vipin

Working capital operation cycle is stock turnover + debtor turnover - creditor turnover = company takes an overdraft to finance their business (positive value) or creditors finance their business (negative value) cheers.

Is This Answer Correct ?    8 Yes 3 No

What is operating cycle?..

Answer / rajesh

The average time it takes for a retailer's or
manufacturer's inventory to turn to cash. If a manufacturer
turns its inventory six times per year (every two months)
and allows customers to pay in 30 days, its operating cycle
is approximately three months

Is This Answer Correct ?    6 Yes 3 No

What is operating cycle?..

Answer / umesh shah

operating cycle in Days= # of days raw material in
warehouse+ # of days work in production centre + # of days
finished product is in warehouse + # of days credit given
to customer - # of days Credit received from supplier

Is This Answer Correct ?    1 Yes 9 No

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