AWhat Is the Operating Cycle for White Bluffs,Inc

question 46

Essay

A.What is the operating cycle for White Bluffs,Inc.if all sales are on credit?
A. Inventory Turnover = CGS/Inventory = 28461/7280 = 3.909.
Days in Inventory = 365/3.909 = 93.37 days.
Accounts Receivable Turnover = Sales/A/R = 44,466/3779 = 11.767.
Days in Receivables = 365/11.767 = 31.02.
Operating Cycle = Days in Inventory + Days in Receivable = 93.37 + 31.02 = 124.39.
B. Average Accounts Receivable = 3779 + 3250/2 = 3514.50
A/R Turnover = 44,466/3514.50 = 12.652.
Days in Receivables = 365/12.652 = 28.85.
Operating Cycle = 93.37 + 28.85 = 122.22.
- Operating Cycle falls because of a smaller average tied up in receivables to generate sales.
B. If you knew that Accounts Receivables were $3,250 the prior year, what effect would this have on your estimate of the operating cycle. Show and explain why.

---

Definitions:

Deadly Weapon

An object capable of causing death or serious bodily injury.

Firearm

A portable weapon that discharges bullets or shells using a burning propellant.

Marital Rape

The act of sexual assault by one spouse against the other, recognized legally as a crime in many jurisdictions.

Illegal

Actions or activities that are forbidden by law or statute, carrying penalties for those who engage in them.