Operating Cycle Worksheet

Operating Cycle

This worksheet helps you determine how long it takes a cash investment

to flow from cash, through inventory, sales and receivables and back to

cash.

Each of the steps can be completed independently for the specific analysis but all 4 steps must be completed

to obtain the operating cycle.

Operating Cycle

days from cash to cash

Receivables Analysis

Step 1.

Enter Days In Statement Period

usually 365 for one year - or multiples of 90

Enter Net Credit Sales

Net credit sales for time period selected

Enter Receivable From Beginning Of Period

Enter Receivables From End Of Period

Average Receivables

Receivable Turnover

This represents the number

of times your firm collected you’re A/R

Days Receivable

Average number of days to collect

any given credit invoice.

Inventory Analysis

Step 2.

Assumption: User is using periodic and FIFO inventory accounting methods

Enter Inventory At Beginning Of Period

Add Purchases

Transportation Costs

Purchase Discounts

Goods Available for Sale

Enter Inventory At End Of Period

Cost Of Goods Sold

Inventory Turnover

This is the average number of times you completely sell

your entire average inventory.

Days In Inventory

This is the number of days an average item remains in your

Inventory

Payables Analysis

Enter Payables

From Current Balance Sheet

Days Payable

This number represents the average time

it take for you to you pay your current obligations

Accruals Analysis

Enter Wage Related Accruals

From Current Balance Sheet

Days Accrual

This number represents the average time

it take for you to you pay your accrued wage

related expenses