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Operating Cycle & Cash Cycle: Definition & Calculations

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Danny buys supplies for his company by paying when he buys the supplies (i.e., paying cash). Which of the following cycles is best for him to use?

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1. Bailey buys products from manufacturers using credit. Which of the following cycles would be best for his business?

2. What is the last step in the cash conversion cycle?

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About This Quiz & Worksheet

There are two types of cycles in business: operating and cash cycles. Gauge your knowledge of these two cycles and when it is best to use them using the quiz and worksheet.

Quiz & Worksheet Goals

Using these materials, test your knowledge of:

  • The last step in the cash conversion cycle
  • How the operating cycle is calculated
  • Calculating the cash conversion cycle
  • Ideal cycle for buying products from manufacturers using credit
  • The best cycle if you buy supplies for your company using cash

Skills Practiced

  • Information recall - access the knowledge you have gained about how to calculate a cash conversion cycle
  • Making connections - use understanding of the concept of an operating cycle and when it is best for companies to use it
  • Reading comprehension - ensure that you draw the most important details from the lesson on operating and cash cycles

Additional Learning

Cover more about these topics by making your way through the lesson called Operating Cycle & Cash Cycle: Definition & Calculations. Utilizing this lesson helps you:

  • Review the buying and selling process for companies
  • Practice calculating the cash conversion cycle
  • Compare and contrast the operating cycle and the cash conversion cycle
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