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What is the link between operating …

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What is the link between operating cycle and working capital?

Posted by Muskan Verma 3 years, 7 months ago

CBSE > Class 12 > Accountancy

1 answers

Sia ? 3 years, 7 months ago

A working capital requirement of a firm depends upon its operating cycle. Here, Operating Cycle is the total period considered starting from the purchase of the raw materials till the final payment has been collected from the debtors. Longer the operating cycle, larger will be the working capital requirement.

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