The operating cycle is the period from inventory purchase until the receipt of cash. Different company characteristics generally define the type of operating cycle that a firm experiences. Five different types of companies are: 1) A convenience store, 2) A furniture store, 3) A car manufacturer, 4) A bookstore, and 5) An oil-field drilling equipment company.
Of the companies listed, select the one you believe would have: 1) The longest operating cycle, 2) The shortest operating cycle, 3) The most unpredictable operating cycle, and 4) The operating cycle most susceptible to changes in payment terms.