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Cash operation cycle??

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Cash operation cycle??

  • This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • December 31, 2019 at 5:03 am #556543
    dwane
    Member
    • Topics: 4
    • Replies: 3
    • ☆

    How an increase in the cash operating cycle will decrease
    profitability?

    December 31, 2019 at 8:58 am #556552
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54657
    • ☆☆☆☆☆

    Because an increase in the cycle will occur because of such things as taking longer to collect receivables and holding more inventories.

    Both of these will increase interest costs (because either they will be borrowing money to finance the increase and paying interest, or because money will be tied up that could otherwise have been earning interest).

    January 1, 2020 at 12:52 pm #556620
    dwane
    Member
    • Topics: 4
    • Replies: 3
    • ☆

    Thank you very much sir you are great

    January 2, 2020 at 6:43 am #556662
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54657
    • ☆☆☆☆☆

    You are welcome 🙂

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