The Operating Cycle of a Company Is the Average Time

question 137

True/False

The operating cycle of a company is the average time required to collect the receivables resulting from producing revenues.

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Definitions:

Operating Capability

Refers to the ability of a company to maintain efficient operations and sufficient capacity to support its business activities.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by comparing its current assets to its current liabilities.