BU127 Lecture 3: Chapter 3
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Goals, plans, strategies (e. g. advertising campaign), measurable indicators (how successful was our strategy?) The time it takes for a company to pay cash to suppliers, sell goods and services to customers, and collect cash from customers. Cycle begins when a company receives goods to sell, pays for them, and sells it to customers and ends when the customer pays cash to the company. Companies attempt to shorten an operating cycle by creating incentives to encourage customers to buy sooner or pay faster --> improves c flow. Walmart moves products through their shelves very quickly (fast/short cycle) Grocery stores have a very high turnover, perishability!!! (fast/short cycle) Fast/short cycles are beneficial as they make accounting easier. E. g. company that built lazardis has a slow/long cycle (it took a long time to build) The long life of a company can be reported in shorter periods ( reports financial information to meet the needs of decision makers)