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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Operating Cycle and Cash operating cycle
Dear lecturer,
Are operating cycle and cash operating cycle different because my lecturer told me the differences, but they seem the same in the book ? My lecturer told me that :
Operating cycle is the time that it takes to convert raw materials into cash = number of days in receivable + number of days in inventory.
Cash operating cycle or working capital cycle is the time between the cash being received from customers and cash being paid to suppliers= number of days in receivable + number of days in inventory – number of days in payable .
Are these two statement true ? Could you give me more detailed information on these ?
For Paper F9, the two expressions are the same and it is the second definition.