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Operating cycle

• The average time intervening between the acquisition of materials or services and the final cash realization from those acquisitions.

• Abbreviated OC. The amount of time that elapses from the point at which the firm begins to build inventory to the point at which cash is collected from sale of the resulting finished product. The recurring transition of a firm's working capital from cash to inventories to receivables and back to cash.

 
 Embedded terms in definition
 Average
Capital
Cash
Firm
Inventories
Inventory
Point
Receivables
Sale
Time
Working capital
 
 Related Terms
 

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