The Operating Cycle Is the Length of Time That a Company

question 66

True/False

The operating cycle is the length of time that a company spends acquiring inventory to sell.

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Definitions:

Du Pont Identity

A formula that breaks down the return on equity into three parts: profit margin, asset turnover, and financial leverage, to analyze a company's financial performance.

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting standards and procedures used in the U.S.

Asset Management Ratios

Financial metrics used to evaluate a company's efficiency in managing its assets to generate sales or revenue.

Common Size Statements

Financial statements that present all items in percentage terms; percentage of total assets for balance sheets and percentage of sales for income statements.