Calculating net operating cycle
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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
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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.
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 ...
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