The operating cycle is _____.

A) the same as the cash cycle
B) not calculated with items from the income statement
C) the length of time it takes to purchase inventory and then convert the sale of the product/inventory into cash
D) generally less than the cash cycle

Operating Cycle

The total time it takes for a company to purchase inventory, sell the products, and collect the cash from the sales.

Cash Cycle

The period it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Inventory

The total amount of goods and materials held by a company intended for sale or production.