The accounting cycle is the accounting process used to record business transactions in accounting books and supply the end-of-accounting-period financial statements. The operating cycle is the ...
A company's operating cycle, or cash conversion cycle, shows the length of time it takes a company to buy inventory, convert it into sales and collect the "accounts receivable" revenue from the sales.
Failure to manage working capital leads a firm into bankruptcy. Operating Cycle (OC) is a tool that helps firms avoid such trouble. Let us look at the computation of OC along with its inference rule.