Operating and Cash Cycles | Business Finance (FINC101)

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The objective of this video is to give an overview on operating cycles and cash cycles. Operating cycle can be defined as the length of time between purchasing inventory & receiving cash from sales. On the contrary, the cash cycle is the length of time between paying for the inventory and receiving cash from sales. Moving on, the video explains all the components of operating & cash cycle as well as discusses inventory period, AP period and AR period in greater details.
Next, the video shows the calculation of turnover- the number of time a year that the average amount of inventory, receivables or payables are sold, recovered or paid. The video introduces inventory turnover which is the number of times a year that average inventory is sold. Later, it also discusses about the account receivable turnover and account payable turnover subsequent to an appropriate example where it shows all calculations simultaneously.

[@janwray]

Thank you for this lesson. Its great.

[@refarahman3543]

This made sm sense thank uuuu

[@jacksonngusi4122]

Good Recture

[@99tambor]

Excellent video!

[@ss-ig7to]

This is so good. thanks.

[@ziaullah8916]

Nice lecture sir

[@vinitayadav5819]

i found this video very helpful for me..can u plz upload its conversion method too.

[@ravindunethmina1772]

super thank u

[@sumayasuzu4781]

Thanks Allah to Great Accounting Lecturers

[@mozpassion8996]

Vi there, when you seu credit Sales do you mean AR?

[@mozpassion8996]

Please explain more about the credit sales

[@mozpassion8996]

What if the cash cycle is negative?

[@arvindmathur6574]

@@mozpassion8996 Negative CCC usually occurs if customers are paying you in advance of the delivery of goods. You must be careful that the advance payment is not siphoned off for some other purpose, otherwise, you will have a problem at the time of delivery. Negative CCC also implies that you will have cash surpluses which be invested in safe instruments,

[@meenu3472]

What if we purchase raw materials on cash?

[@arvindmathur6574]

you will extend your cash conversion cycle (CCC) and block your cash which is generally not a good idea. It may make sense if you can get a large discount by paying on delivery.You may want to do this if your CCC is negative and interest rates are very low.

[@arvindmathur6574]

Also by paying cash upon delivery you will have a good reputation with sellers as a paymaster and they will be more willing to offer you discounts.

[@kmccracken150]

accent ruined the video in-vin-tore-ee not in-vent-uh-ree