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What is an operating cycle?

14. What is an operating cycle?

1. A metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
2. The time it takes a company to buy goods, sell them and receive cash from the sale of said goods.
3. The process of hiring personnel to conduct the daily operations of the business.
4. collective process of identifying, analysing, and recording the accounting events of a company.

Answer: B) The time it takes a company to buy goods, sell them and receive cash from the sale of said goods

Explanation:

An operating cycle refers to the time it takes a company to buy goods, sell them and receive cash from the sale of said goods. In other words, it's how long it takes a company to turn its inventories into cash. The length of an operating cycle is dependent upon the industry.