The Difference Between a Firm's Operating Cycle and Its Cash

question 11

Multiple Choice

The difference between a firm's operating cycle and its cash cycle is ________.

• A) its account receivable days
• B) its accounts payable days
• C) its inventory days
• D) There is no difference between the cash and operating cycles.

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Definitions:

Debt Repayment

The act of paying back money previously borrowed from lenders, which may include both the principal amount and interest.

Financial Statements

Written records that convey the business activities and the financial performance of a company, including the balance sheet, income statement, and cash flow statement.

Public Sector Entities

Organizations that are part of the government sector, including departments, agencies, and various publicly funded operations.

Efficient

Characterized by achieving maximum productivity with minimum wasted effort or expense; operating in an effective way.