The operating cycle for a merchandiser is

the period of time it takes to sell a unit of inventory.

the same for all companies.

most generally a year.

the time to buy, hold, sell, and collect payment for a sale.

A merchandiser will earn an operating income of exactly $0 when

gross margin equals operating expenses.

net sales equals cost of goods sold.

cost of goods sold equals gross margin.

operating expenses equal net sales

Positive operating income will result if gross margin exceeds

operating expenses

purchases

cost of goods sold

cost of goods sold minus operating expenses