Operating cycle and overtrading and over capitalisation

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December 8, 2016 at 10:04 pm #362470
abdulbasit16
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Sir can u pls brief the connection between operating cycle and overtrading, and operating cycle and over capitalisation?

Does long operating cycle mean over capitalisation?
December 9, 2016 at 7:10 am #362527
John Moffat
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I can’t write it briefly – I recorded an entire free lecture on this and I cannot possibly type out the whole lecture here!!

A long operating cycle can be an indicator of overcapitalisation, but it does not necessarily mean there is overcapitalisation.
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