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Operating Cycle and Cash operating cycle

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Operating Cycle and Cash operating cycle

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by AvatarJohn Moffat.
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  • March 15, 2016 at 10:41 am #306455
    Avatarmanirak
    Member
    • Topics: 24
    • Replies: 24
    • ☆

    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 ?

    March 15, 2016 at 11:36 am #306459
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54837
    • ☆☆☆☆☆

    For Paper F9, the two expressions are the same and it is the second definition.

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