What is operating cycle?
Answers were Sorted based on User's Feedback
Answer / gurdeep singh
It is the time period involved in the conversion of raw
material/resources into finished goods or services
including the credit period involved for selling
products/services.
In simple language……. let me give you an extreme example
Suppose a business buy raw material on 1st jan and it takes
one month to convert this raw material into finished goods.
On 1st feb good are ready for sale i.e. stocked at
warehouse on 1st march goods are sold and on 1st april
payment is received. Now this revenue will be used to buy
fresh raw material.
The Operating cycle is 3 months….. The time taken to
convert Working capital into revenue.
Correct me if I m wrong ……………….
Is This Answer Correct ? | 63 Yes | 8 No |
Answer / rajani
The average time between purchasing or acquiring inventory
and receiving cash proceeds from its sale.
Is This Answer Correct ? | 24 Yes | 2 No |
Answer / ramu
raw material - work in progress - finished goods - sale of
the goods - cash - raw material
Is This Answer Correct ? | 31 Yes | 12 No |
Answer / n.vanitha
OPERATING CYCLE STRAT WITH CASH ENDS WITH CASH I.E IT START
RAW MATERIAL WITH THE CASH
CASH-RAW MATERIAL-WORKING PROGRESS-FINISHED GOODS-SALES-
DEBTORS-CASH.IT IS OPERATING CYCLE
Is This Answer Correct ? | 8 Yes | 3 No |
Answer / vipin
Working capital operation cycle is stock turnover + debtor turnover - creditor turnover = company takes an overdraft to finance their business (positive value) or creditors finance their business (negative value) cheers.
Is This Answer Correct ? | 8 Yes | 3 No |
Answer / rajesh
The average time it takes for a retailer's or
manufacturer's inventory to turn to cash. If a manufacturer
turns its inventory six times per year (every two months)
and allows customers to pay in 30 days, its operating cycle
is approximately three months
Is This Answer Correct ? | 6 Yes | 3 No |
Answer / umesh shah
operating cycle in Days= # of days raw material in
warehouse+ # of days work in production centre + # of days
finished product is in warehouse + # of days credit given
to customer - # of days Credit received from supplier
Is This Answer Correct ? | 1 Yes | 9 No |
Wat is the security analysys?what is portfolio management? wat is the difference between security analysys@portfolio management?
retained earnings will change over time due to what factors, retained earnings will increase.
what is the nature of bill receivable and consignmenta/c
I know that rate of stock turnover = cost of goods sold/ average of stock. average of stock = (opening stock + closing stock)/ 2 what happens if it is a new business with no opening stock? do u take closing stock/2 or simply just take closing stock as the average stock figure?
What is the diff. between gross profit and net profit?
EXPAND______________PGDC
What is the meaning of bank reconcilation statement (brs)???
18 Answers Accenture, AirTech, Anantha Infra, BRS, HP, Wipro,
after directing tally 9 to calculate interest as per 30 day option basis on a loan account.........,it still calculates interest as per calender month when checked on to display>statements of accounts>interest payable in tally 9 ...where is the error?? how to correct the function.
We are an educational institution head office in chennai. We don't have Tin Nos. Sales Tax nos, and CST Nos. we have only Service tax nos. if i purchase a computer in chennai and i transfer it to our institute which is in bangalore.Is it possible. what are the documents required for this.
what is minority interest?
why is interest on capital an expense....??
What is mean by Debt Equity Ratio ?