Answer :
According to the question of accounts, the company's operating cycle is 57.2 days.
The operating cycle is the time it takes for a company to convert its inventory into cash through the sales process. It is calculated by adding the inventory period (time to sell inventory) and the accounts receivable period (time to collect payment from customers) and subtracting the accounts payable period (time to pay suppliers).
In this case, the inventory period is 25.5 days, the accounts payable period is 371 days, and the accounts receivable period is 31.7 days. To calculate the operating cycle, we add the inventory period (25.5 days) and the accounts receivable period (31.7 days) and subtract the accounts payable period (371 days):
Operating cycle = Inventory period + Accounts receivable period - Accounts payable period
= 25.5 days + 31.7 days - 371 days
= 57.2 days
Therefore, the company's operating cycle is 57.2 days.
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