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26 May, 09:01

Kurt's entertainment has a receivables turnover rate of 14.8, a payables turnover rate of 10.4 and an inventory turnover rate of 22.6. what is the length of the firm's operating cycle?

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  1. 26 May, 11:01
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    The firm’s operating cycle is equivalent to the sum of the total number of days of a cycle of the receivables turnover and the inventory turnover.

    Receivables turnover = 365 days / 14.8 = 24.66 days

    Inventory turnover = 365 days / 22.6 = 16.15 days

    Operating cycle = 24.66 days + 16.15 days = 40.81 days

    Answer: 40.81 days
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