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A B C D E F G H K L M N ALT-OPERATING-CYCLE Score: /5 Choose Exercise (1-5) Company: HOME DEPOT Ticker: HD Statement Date: 1/31/19 The operating cycle is the amount of time it takes to go SALES $108.203.000 from CASH to INVENTORY to ACCOUNTS RECEIVABLE and COST OF GOODS SOLD $71.043.000 then back to CASH. Each time the cycle executes, you make ACCOUNTS RECEIVABLE $1.640.000 profit. How many days does it take for steps 1-2-3-4-5? INVENTORY $13.925.000 times/yr. 0 COMPUTE INVENTORY TURNOVER = COGS/INVENTORY Operating Cycle (1-5) 1. CASH days 0 COMPUTE DAYS SALES IN INVENTORY = 365/INVENTORY TURNOVER times/yr. 0 COMPUTE ACCOUNTS RECEIVABLE TURNOVER = SALES/ACCOUNTS RECEIVABLE 5.COLLECT 2. PURCHASE days 0 COMPUTE AVERAGE COLLECTION PERIOD = 365/ACCOUNTS RECEIVABLE TURNOVER ACCOUNTS INVENTORY RECEIVABLE ys 0 ADD THE DAYS SALES IN INVENTORY + AVERAGE COLLECTION PERIOD The time it takes to purchase and sell the inventory + the time it takes to collect the accounts receivable will be displayed in cell G16. This is the operating cycle time. Should be as short as possible. 3. SELL 4. ACCOUNTS INVENTORY RECEIVABLE