Register now or log in to join your professional community.
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