A firm's operating cycle (OC) is simply the sum of the average age of inventory (AAI) and the average payment period (APP).

Name: A firm's operating cycle (OC) is simply the sum of the average age of inventory (AAI) and the average payment period (APP).
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The operating cycle (OC) is actually the sum of the average age of inventory (AAI) and the average collection period (ACP), not the average payment period (APP).

A Firm's Operating Cycle (OC) Is Simply the Sum of the Average