With a simple equation, explain working capital cycle?

Question

Soliman Abd ALmalak Gendy · Answer

Working capital cycle is  the amount of time it takes to turn the net current .
assets and current liabilities into cash
_It is a measure of both a company''s efficiency and its short_term financial health

Abdulrasheed olabode · Answer

Working capital cycle is also known as operating cycle. it measures the number of days it takes to convert current asset and current liabilities into cash.

Working capital cycle = {(average usage of raw material/purchases) + (average W.I.P/ Cost of production) + (avegrage Finished goods/cost of sales) + (average Debtors/sales) - (average Creditors/Purchases)} * 365 days

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With a simple equation, explain working capital cycle?

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