Written Assignment: Operating Cycle

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The operating cycle is the period from inventory purchase until the receipt of cash. Different company characteristics generally defines the type of operating cycle that a firm experience.

Here are five distinct types of companies are: 1) A convenience store, 2) A furniture store, 3) A car manufacturer, 4) A bookstore, and 5) An oil-field drilling equipment company.

Of the companies listed, select the one you believe would have: 1) The longest operating cycle, 2) The shortest operating cycle, 3) The most unpredictable operating cycle, and 4) The operating cycle most susceptible to changes in payment terms.

As you make your selections, be sure to explain your reason for the selection and criteria that you used to make your choices about the prediction of the relative length of a particular company's cycle.