Answer:
Operating cycle
Explanation:
The operating cycle = Days inventory outstanding + days sale outstanding
where,
Day inventory outstanding = (Beginning inventory + ending inventory) ÷ cost of goods sold × number of days in a year
And,
Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) ÷ Net sales × number of days in a year
The operating cycle is a combination of both days inventory outstanding and day sale outstanding
