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The operating cycle for a company is one year. Do you agree

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The operating cycle for a company is one year. Do you agree? Why or why not? Provide support for your opinion by giving an example to illustrate your argument.

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Solution Summary

No, I disagree and I say why in clear everyday language so you can get it.

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I disagree. The operating cycle is the length of time it takes to acquire inventory, sell it, and collect from customers. In other words, the time from cash out to get inventory to when cash comes back in from selling it. For most firms, this is less than a year. Some businesses have very short ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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