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Is it possible for a firm's cash cycle to be longer than its operating cycle? Explain why or why not. Use the following information to answer Questions 6-10: Last month, BlueSky Airline announced that it would stretch out its bill payments to 45 days from 30 days. The reason given was that the company wanted to "control costs and optimize cash flow." The increased payables period will be in effect for all of the company's 4,000 suppliers.

   Is it possible for a firm's cash cycle to be longer than its operating cycle? Explain why or why not. Use the following information to answer Questions 6-10: Last month, BlueSky Airline announced that it would stretch out its bill payments to 45 days from 30 days. The reason given was that the company wanted to "control costs and optimize cash flow." The increased payables period will be in effect for all of the company's 4,000 suppliers.
 
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Fundamentals of Corporate Finance
Fundamentals of Corporate Finance
Stephen A. Ross;… 11th Edition
Chapter 18, Problem 5 ↓

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On the other hand, the operating cycle of a firm refers to the time it takes for a firm to convert its inventory into sales and then collect the cash from the sale. In this case, BlueSky Airline has decided to stretch out its bill payments to 45 days from 30  Show more…

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Is it possible for a firm's cash cycle to be longer than its operating cycle? Explain why or why not. Use the following information to answer Questions 6-10: Last month, BlueSky Airline announced that it would stretch out its bill payments to 45 days from 30 days. The reason given was that the company wanted to "control costs and optimize cash flow." The increased payables period will be in effect for all of the company's 4,000 suppliers.
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