Explore BrainMass
Share

Explore BrainMass

    Calculating net operating cycle

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Question:
    Below are part of the financial statements ABC Corp. provided, presented in millions of US dollars.
    please calculate the net operating cycle based on the information provided.

    Sales 400,000
    Cost of Goods Sold 350,000
    Inventories as of 12/31/12 40,000
    Inventories as of 12/31/13 43,400
    Receivable as of 12/31/12 6,000
    Receivable as of 12/31/13 7,000

    © BrainMass Inc. brainmass.com October 10, 2019, 7:41 am ad1c9bdddf
    https://brainmass.com/business/the-accounting-cycle/calculating-net-operating-cycle-591571

    Solution Preview

    Net Operating Cycle = #Days of Sales of Inventory + #Days of Sales Outstanding

    #Days of Sales of Inventory = 365 * Average Inventories/Purchases

    #Days of Sales ...

    Solution Summary

    This response provides a step by step solution for the calculation of a company's net operating cycle based on its inventory, receivable, cost of goods sold, and sales.

    $2.19