Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory. Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory. To Explain : The difference between cash cycle and operating cycle of a firm.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Don't used hand raiting

1 2 Fast Clipboard F17 DITECTIONS. BIU- Font B X C A. fx =C17+D17-E17 E F Merge & Center - 4 $ - % 9 4.0.00 Conditional Format as .00 9.0 Alignment Number Cell Formatting - Table - Table Styles - Styles Insert Delete Fe Cells H Mario Armando Perez is the kitchen manager at the Asahi Sushi House. Mario's restaurant offers five popular types of sushi roll. Mario keeps 4 careful records of the number of each roll type sold, from which he computes each item's popularity index. For March 1, Mario estimates 150 5 guests will be served. 6 8 9 10 11 04 At the end of the day, Mario also records his actual number sold in order to calculate his carryover amount for the next day. 7 Based on his experience, and to ensure he does not run out of any item, Mario would like to have extra servings (planned overage) of selected menu items available for sale. Using planned overage, the popularity index of his menu items, and his prior day's carryover information, help Mario determine the amount of new…

Your company is planning to borrow $2.75 million on a 5-year, 16%, annual payment, fully amortized term loan. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Amortization Loan amount $2,750,000 Term in years 5 Annual coupon rate 16.00% Calculation of Loan Payment Formula Loan payment = #N/A Loan Amortization Schedule Year Beginning Balance Payment Interest Principal Ending Balance 1 2 3 4 5 Formulas Loan Amortization Schedule Year Beginning Balance Payment Interest Principal Ending Balance 1 #N/A #N/A #N/A #N/A #N/A 2 #N/A #N/A #N/A #N/A #N/A 3 #N/A…

Answer 2

Question

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Answer 6

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Answer 7

Chapter 19, Problem 1CC

Summary Introduction

Cash cycle: Cash cycle indicates that period of time which lies between the cash payment made by the firm to purchase inventory and cash received for cash sales of finished goods inventory which is produced by previously purchased inventory.

Operating cycle: It refers to the average passage of time between the initial inventory acquired and the cash received from the sale of that same inventory.

To Explain: The difference between cash cycle and operating cycle of a firm.

Answer 8

Expert Solution & Answer

Answer to Problem 1CC

Solution:

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The difference between cash cycle and operating cycle are mentioned below:

The cash cycle starts with the outflow of cash to acquire inventory but operating cycle starts when inventory is actually acquired.
The purpose of cash cycle is to indicate the management of cash flow and operating cycle indicates the efficiency of company in its operations.
The cash cycle can be negative in nature but operative cycle cannot be negative.
The time duration of cash cycle and operating cycle can be same if the inventory is purchased on cash.
If inventory is purchased on credit and payment is made after some days then the cash cycle will be shorter than the operating cycle.

Answer 12

Conclusion

The cash cycle and operating cycle both can be same or different, depends upon the mode of inventory purchase.

Answer 13

Ch. 19 - Prob. 1CC Ch. 19 - Prob. 2CC Ch. 19 - Prob. 3CC Ch. 19 - Prob. 4CC Ch. 19 - Prob. 5CC Ch. 19 - Prob. 6CC Ch. 19 - Prob. 7CC Ch. 19 - Prob. 8CC Ch. 19 - Prob. 9CC Ch. 19 - Prob. 10CC

Answer to Problem 1CC

Explanation of Solution

Want to see more full solutions like this?

Chapter 19 Solutions