Q1-Can Cash Operating Cycle be negative? Q2-What's the use of "Bank" under "Current Assets" and "Taxation" under "Current Liabilities" in calculating Cash Operating Cycle? Please friendz answer my questions.
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FMQuestion from Working Capital Management
14y ago#11) Yes, but if is it then the business has enormous liquidity problems and is going to collapse It cannot continue trading on that basis for too long.
2) bank and tax are irrelevant for these purposes - the operating cycle is measuring how ling cash is tied up in operations.
(but both are obviously relevant when measuring liquidity in general)
2) bank and tax are irrelevant for these purposes - the operating cycle is measuring how ling cash is tied up in operations.
(but both are obviously relevant when measuring liquidity in general)
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