The cash-to-cash operating cycle is the number of days' sales in
A)receivables and working capital.
B)receivables and plant assets.
C)inventory and receivables.
D)inventory and plant assets.

Question

Quizplus · Accepted Answer

The cash-to-cash operating cycle measures the number of days it takes for a company to convert its inventory into cash through the sale of goods and the collection of accounts receivable. Therefore, the correct choice is C, which involves inventory and receivables. Choice A involves working capital, which may or may not be reflected in the cash-to-cash cycle, while choices B and D involve plant assets, which are not directly related to the cycle.

The Cash-To-Cash Operating Cycle Is the Number of Days' Sales