The cash operating cycle of a business is the time it takes the business from its payment of purchase of raw material to the time cash is received from their sale.

May 21, 2025 · CCC traces the life cycle of cash used for business activity. It follows cash through inventory and AP, then into expenses for product or service development, to sales and AR, and then …

The operating cycle (OC) is often confused with the net operating cycle (NOC). The NOC is also known as the cash conversion cycle or cash cycle and indicates how long it takes a company to collect cash …

Jun 13, 2022 · The cash operating cycle is the gross operating cycle less the creditor’s collection period. It is the time period for which there is a requirement for working capital.

Working capital represents the net current assets available for day-to-day operating activities. It is defined as current assets less current liabilities and, in exam questions, the components are usually …

Dec 16, 2025 · Below are two key differences between an operating cycle vs a cash cycle. The operating cycle measures the time it takes a business to convert inventory into cash, while the cash …

The operating cycle, also known as the cash cycle of a company, is an activity ratio measuring the average period required for turning the company’s inventories into cash.