Suppose that tucker industries has annual sales of $6.60 million, cost of goods sold of $2.94 million, average inventories of $1,205,000, and average accounts receivable of $660,000. assuming that all of tucker's sales are on credit, what will be the firm's operating cycle? (round your answer to 2 decimal places.)

186.10 days

Explanation:

The operating cycle = Days inventory outstanding + days sale outstanding

where,

Day inventory outstanding = (Beginning inventory + ending inventory) ÷ cost of goods sold × number of days in a year

= ($1,205,000) ÷ $(2,940,000) × 365 days  

= 149.60 days

Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) ÷ Net sales × number of days in a year

= ($660,000) ÷ ($6,600,000) × 365 days

= 36.5 days

Now put these days to the above formula  

So, the days would equal to

= 149,60 days + 36.5 days

= 186.10 days

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