High School

A company has an inventory period of 25.5 days, an accounts payable period of 37.1 days, and an accounts receivable period of 31.7 days. What is the company's operating cycle?

Answer :

A company has an inventory period of 25.5 days, an accounts payable period of 37.1 days, and an accounts receivable period of 31.7 days. The company's operating cycle is 57.2 days.

Determine the inventory period, accounts payable period, and accounts receivable period.

Add the inventory period and accounts receivable period to get the operating cycle.

In this case, the inventory period is 25.5 days, accounts payable period is 37.1 days, and accounts receivable period is 31.7 days.

Find the operating cycle, we add the inventory period and accounts receivable period.

So, the operating cycle is 25.5 days + 31.7 days = 57.2 days.

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