![]() Cash operating cycle Inventory days + Receivables days Payables days. The answer to certain tax and accounting issues is often highly dependent on the fact situation presented and your overall financial status. The cash operating cycle (also known as the working capital cycle or the cash conversion cycle) is the number of days between paying suppliers and receiving cash from sales. ![]() While the concepts discussed herein are intended to help business owners understand general accounting concepts, always speak with a CPA regarding your particular financial situation. The working capital turnover ratio is a vital metric for managing business operations as it helps to ensure that a company is using its working capital efficiently to generate revenue. Therefore, the information available via this website and courses should not be considered current, complete or exhaustive, nor should you rely on such information for a particular course of conduct for an accounting or tax scenario. During the same period, capital expenditure (CAPEX), as a percentage of revenues. Tax and accounting rules and information change regularly. Companies are facing operational challenges in converting revenue into cash. Reliance on any information provided on this site or courses is solely at your own risk. Accounting practices, tax laws, and regulations vary from jurisdiction to jurisdiction, so speak with a local accounting professional regarding your business. ROA ratio is often used by management to measure the companys financial performance and assess operational performance in utilizing the companys resources. The content is not intended as advice for a specific accounting situation or as a substitute for professional advice from a licensed CPA. The content provided on and accompanying courses is intended for educational and informational purposes only to help business owners understand general accounting issues.
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