What does operating cycle mean? It is the period a company takes from the moment it buys goods → to selling them → to collecting money from the customer. Its main components: 1 Inventory holding period 2 Accounts receivable collection period 3 Sometimes compared to the cash cycle to understand liquidity strength 📌 A simple example: If a company needs 60 days to sell inventory + 30 days to collect from customers Then the operating cycle = 90 days (This is considered an excellent indicator if the company operates in fast-moving trade) 🔥 Why does it matter to you? Because it shows management's efficiency in sales and collection and directly affects the company's profitability. 🎓 Follow Dr. Hassan El Masry To understand accounting in a simple way... it sticks the information in your mind from the first time. 📞 To contact: ( Phone number appears when clicking the contact button ) #Hassan_ElMasry #Dr_Hassan_ElMasry #Riyadh #Riyadh_SaudiArabia #Exit7 #Final_Reviews #Accounting_Courses