Bradco Supply currently has an operating cycle of 62 days. The company is analyzing some operational...
Bradco Supply currently has an operating cycle of 62 days. The company is analyzing some operational changes, which are expected to decrease the accounts receivable period by 2 days and increase the inventory period by 5 days. The accounts payable turnover rate is expected to increase from 24 to 28 times per year. If all of these changes are adopted, what will the company's new operating cycle be?
Please show all correct calculations. Thank you.
Homework Answers
New operating cycle = current operating cycle-decrease in accnt receivable+increase in inventory period
=62-2+5=65 days
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