Net Trading Cycle
Hello Ned . Is Net Trading Cycle representing a period of time ? the term speaks for that meaning , and by considering that , why did u explain it in terms of amount of money the company owes Suppliers and the amount of money the company owns ??
the net trading cycle shows how long the cash is tied up in a company's operations.
It is closely related to the accounts receivable from clients (AR) and accounts payable to suppliers (AP) at a given time.
However, based on AR, AP, and inventory balances, you need to calculate the relevant "days" ratios, which determine the net trading cycle.
I hope this helps.
The 365 Team