operating cycle
[/ˈɒp.ər.eɪ.tɪŋ ˈsaɪ.kəl/]
nounpl: operating cycles
ciclo operacional
1. The period of time between the purchase of inventory and the collection of cash from the sale of that inventory, representing the complete business cycle of operations
The company's operating cycle is approximately 45 days, from raw material purchase to final payment collection.
O ciclo operacional da empresa é aproximadamente de 45 dias, desde a compra de matéria-prima até o recebimento do pagamento final.
2. The timeframe required to convert investments in inventory and receivables back into cash
A shorter operating cycle indicates more efficient working capital management.
Um ciclo operacional mais curto indica uma gestão de capital de giro mais eficiente.
3. In accounting and finance, the duration encompassing the purchase of materials, production, sale, and cash collection phases
Retailers typically have a shorter operating cycle than manufacturers.
Varejistas geralmente têm um ciclo operacional mais curto do que os fabricantes.
The operating cycle is a fundamental concept in financial management taught in business schools and used by CFOs and financial analysts in both Brazil and the USA. In Brazilian corporations, understanding the ciclo operacional is crucial for managing cash flow in inflationary environments and for calculating working capital needs. This metric is especially important for small and medium-sized enterprises (SMEs) in Brazil to maintain liquidity.
Related Idioms & Phrases
complete the operating cycle
shorten the operating cycle
optimize the operating cycle
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