The operating cycle is typically defined as the time it requires to convert

A) cash to inventory to receivables
B) raw materials to finished goods
C) finished goods to receivables to cash
D) cash to inventory to receivables to cash

Operating Cycle

An operating cycle is the average period of time it takes for a business to convert its inventory into cash proceeds from sales.

Receivables

Amounts owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Raw Materials

Basic materials and substances used in the initial production or manufacturing of goods.