Operating cycle

The operating cycle, or working capital cycle, is calculated by deducting creditor days from stock days plus debtor days. It represents the period of time which elapses between the point at which cash begins to be expended on the production of a product and the collection of cash from the customer.

 

reference: Business Studies / Accounting. Accounts & Finance Glossary. Jim Riley BA(Hons) MBA FCA // tutor2u

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