Question 14 which one of these actions will increase the operating cycle? assume all else held constant.?

The complete question is as follows:

Which one of these actions will increase the operating cycle? Assume all else held constant.

A. Increasing the payables period.

B. Decreasing the average inventory level.

C. Increasing the inventory turnover rate.

D. Decreasing the receivables turnover rate.

E Decreasing the payables period.

Answer : Which one of these actions will increase the operating cycle? Assume all else held constant.

A. Increasing the payables period.

B. Decreasing the average inventory level.

C. Increasing the inventory turnover rate.

D. Decreasing the receivables turnover rate.

E Decreasing the payables period.

Answer : D. Decreasing the receivables turnover rate.

We can calculate the operating cycle with the following formula :

Operating cycle = Days' sales of Inventory + Day Sales outstanding

In the formula above, (Net credit Sales /Average accounts receivable) is known as the accounts turnover rate. A decrease in rate means that a company is taking more time to collect its receivables from its customers than ever before. This, in turn will result in an increase in day sales outstanding and hence, increase the operating cycle.

net worth is the difference between what you own and what you have. if you exceed your liabilities you have a positive net worth. if your liabilities are greater than your assets you have a negative net worth. its a snapshot of your financial situation. if you calculate your net worth you will see the end result of everything you've earned and spent as of now. net worth statements and all you asked of can you determine where you are, how to get where you want to be, if your spending   to much. honestly it can tell you a lot of things. i can go on, but you can paint the picture from here.

explanation:

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