Introduction to Operating Cash Cycle
While assessing the liquidity of a business, it is significant to be aware of the operating cash cycle (OCC). In the matter of a business which purchases goods on credit for consequent resale on credit (for instance, a wholesaler), this might be described as the time period among the outlay of cash essential for the purchase of inventories and the final receipt of cash from the credit customer.
Figure: depicts that payment for inventories obtained on credit takes place sometime after those inventories have been purchased and, so no immediate cash outflow occurs from the purchase. Likewise, cash receipts from credit customers will take place sometime after the sale is made. So, there will be no immediate cash inflow like a result of the sale. The operating cash cycle (OCC) is the time period among the payment made to the supplier for goods and the cash that received from the credit customer. However Figure 7.2 depicts the position for a wholesaling business, the definition of the operating cash cycle (OCC) can simply be adapted for other types of businesses, like manufacturers and retailers.
The operating cash cycle (OCC) is significant because it has an important affect on the financing needs of the business. Generally speaking, the longer the cycle, the greater the financing needs of the business and the greater the financial risks. Because of this reason, a business may want to decrease the OCC to the minimum possible period.
For the kind of business which buys inventories and then sells them on credit, the operating cash cycle (OCC) can be computed from the financial statements through using specific ratios.
The calculation is as displayed in Figure as follow:
Figure: calculating the operating cash cycle
Latest technology based Financial Accounting Online Tutoring Assistance
Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Operating Cash Cycle homework help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Operating Cash Cycle, project ideas and tutorials. We provide email based Operating Cash Cycle homework help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Operating Cash Cycle. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Financial Accounting homework help and assignment help services. They use their experience, as they have solved thousands of the financial accounting assignments, which may help you to solve your complex issues of Operating Cash Cycle. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.
www.tutorsglobe.com assignment help tutorials: explain various characteristics or features of operation research and management application of or – operation research theory and concepts.
tutorsglobe.com mechanism of photosynthesis assignment help-homework help by online photosynthesis tutors
Coordination in Animals tutorial all along with the key concepts of Neuron, Importance of Coordination and Sensory Receptors
tutorsglobe.com treatment of chlamydia assignment help-homework help by online chlamydia tutors
Phylum Echinodermata tutorial all along with the key concepts of Features of Phylum Echinodermata, Class Asteroidea, Class Ophiuroidea, Class Echinoidea, Class Holothuroidea and Class Crinoidea
Relativistic Energy tutorial all along with the key concepts of Relativistic Work and Energy, Mass-Energy Equivalence, Transformation of Momentum and Energy
online clep exam preparation course and online clep tutoring package offered by tutorsglobe are the most comprehensive and customized collection of study resources on the web, offering best collection of clep practice papers, quizzes, clep test papers, and guidance.
tutorsglobe.com poultry assignment help-homework help by online applied biology tutors
tutorsglobe.com biological oxidation assignment help-homework help by online biochemistry tutors
Dibenzopyrones tutorial all along with the key concepts of pyrilium salts and other benzopyrones, Definition of Benzopyran, Benzopyrones, History of Coumarin, Synthesis of Coumarin, Natural occurrences of Coumarin, Introduction to Pyrylium salt, Chemical properties of Pyrylium salt and Pyrones
First-class Computer Organization or Architecture Assignment Help is available 24x7 with PhD tutors to resolve all problems and to ace your grades
tutorsglobe.com process of urea assignment help-homework help by online urea cycle tutors
tutorsglobe.com structure and functions of immune system assignment help-homework help by online immunology tutors
Approach our apt Russian History Assignment Help tutors and attain excellent grades without any efforts at low prices.
solutions and phase equilibrium tutorial all along with the key concepts of pure substances and solutions, differentiating between pure substances and solutions, phase equilibrium and definition of phase
1934064
Questions Asked
3689
Tutors
1481609
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!