Question

According to the Working Capital Management concept,

Q: Answer-According to the Working Capital Management concept, the operating cycle is calculated using which o...

The Net Operating Cycle NOC measures the time between outlaying cash for raw material and receiving cash from product sales. It includes the Inventory Holding Period , Debtor Collection Period , and subtracts the Payables Payment Period . This helps in understanding how efficiently a company is managing its working capital.

the operating cycle is calculated using which of the following formulas?

A Gross Operating Cycle = Inventory Holding Period + Debtor Collection Period

B Net Operating Cycle = Inventory Holding Period + Debtor Collection Period – Payables Payment Period

C Gross Operating Cycle = Inventory Holding Period + Payables Payment Period

D Net Operating Cycle = Inventory Holding Period + Payables Payment Period

E Gross Operating Cycle = Debtor Collection Period – Payables Payment Period

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According to the Working Capital Management concept,

Solution