The operating cycle must lengthen when the:

A) Accounts receivable turnover rate increases.
B) Accounts payable period increases.
C) Cash cycle decreases.
D) Inventory turnover rate decreases.
E) Accounts receivable period decreases.

Operating Cycle

The operating cycle is the duration it takes for a business to convert its inventory and other inputs into cash through sales, encompassing the production and sales process.

Accounts Receivable Turnover

A financial metric that measures how frequently a business can convert its accounts receivable into cash over a specific period.

Inventory Turnover

Inventory turnover is a ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.