Asked by Brian Williams on Jul 18, 2024
Verified
Your firm has an inventory turnover rate of 22, a payables turnover rate of 9, and a receivables turnover rate of 17. How long is your firm's operating cycle?
A) 38.06 days
B) 48.00 days
C) 53.98 days
D) 62.03 days
E) 78.62 days
Operating Cycle
The average period of time between the purchase of goods and services for production and the receipt of cash from sales of the final products.
Inventory Turnover
A financial ratio that measures how many times a company's inventory is sold and replaced over a specific period.
Payables Turnover
A financial ratio that shows how quickly a company pays off its suppliers by comparing net purchases to average accounts payable.
- Understand how inventory management and turnover rates impact the operating cycle.
Verified Answer
Learning Objectives
- Understand how inventory management and turnover rates impact the operating cycle.
Related questions
Spomer Corporation's Inventory at the End of Year 2 Was ...
A Firm Has an Inventory Turnover Rate of 16, a ...
Lambert's Auto Mart Had a Beginning Inventory of $1,400,800, Purchases ...
A Merchant Had a Beginning Inventory with a Retail Value ...
Ribaudo Corporation Has Provided the Following Financial Data from Its ...