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Why is the normal operating cycle for a merchandising company likely to be longer than for a service company?
Why is the normal operating cycle for a merchandising company likely to be longer than for a service company?
How can a company improve its operating cycle?
To improve the operating cycle of a company that is required availability of human resources that is really qualified of the company. It requires a team work that can work together.
Estimate the length of a company's operating cycle?
This is a difficult question to answer for there are too many variables.
What are the different between an operating cycle and a cash conversion cycle?
Operating cycle is the period in which company purchase raw material and good manufactured from that raw material while cash cycle is investing cash in inventory to manufacture the goods and selling the goods and earning cash from that sales and after that collecting cash from debtors.
What is the operating cycle of a merchandising company?
The normal operating cycle of a service company includes the following steps : 1. Perform services. 2. Accounts Recievable 3. Get cash There are no goods involved. Only a service has to be performed, thus no dependencies from suppliers etc. The operating cycle of a merchandising company has some additional steps 1.Buy inventory 2. Sell inventory 3. Accounts recievable 4. Get cash The goods have to be ordered from suppliers of wholesalers and stored. Then goods from inventory are sold.
How receivables collection period may affect the operating cycle?
Receivables collection period refers to the number it takes debtors to pay which is about the last part of the operating cycle where the company will generate the required cash to start another cycle. the longer it takes the debtors to pay, the longer the operating cycle becomes however short are the other elements such as raw material conversion cycle, work in progress conversion cycle, marketing and distribution cycle for finished goods. since most companies run their account on accrual basis such that it gives rise to selling goods and services on credit, there will be need to have a good collection policy in place so as to avoid tying down capital in the hands of customers and most importantly to shorten the average collection period to have a shorter operating cycle. the shorter the operating cycle, most especially for merchandising, the better the company's efficiency. Lateef Ismail Adebayo Credit and Marketing Union Bank of Nigeria Plc. +2348035571160.
What is operating cycle in accounting management?
Operating cycle is the time which required by the business from acquiring inventory to production and selling of products and generating revenue.
What is a cash operating cycle?
A Cash operating Cycle is the average time taken to acquire goods and services and convert them to cash in producing revenues
What is the operating cycle of a merchandising business?
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When was North Absheron Operating Company created?
North Absheron Operating Company was created in 1997.
When was Telephone Operating Company of Vermont created?
Telephone Operating Company of Vermont was created in 2008.
When was Campion Cycle Company created?
Campion Cycle Company was created in 1901.
