Enter the days inventory outstanding, days sales outstanding, and days payable outstanding. The calculator will evaluate the average operating cycle.

- Days In Inventory Calculator
- Cash Ratio Calculator
- Inventory Turnover Ratio Calculator
- Operating Expense Calculator
- Carrying Cost Calculator

## Operating Cycle Formula

The following formula is used to calculate the average operating cycle.

NOC = DIO + DSO - DPO

- NOC is the net operating cycle
- DIO is the days inventory outstanding.
- DSO is the days sales outstanding
- DPO is the days payables outstanding

To calculate the operating cycle, subtract the days payable outstanding from the days sales outstanding, then add the days inventory outstanding.

## Operating Cycle Definition

An operating cycle is a total number of days between inventory being sold and the days to receiving the payable for that inventory.

## Operating Cycle Example

How to calculate operating cycle?

**First, determine the DIO.**Calculate the days inventory outstanding.

**Next, determine the DSO.**Calculate the days sales outstanding.

**Next, determine the DPO.**Calculate the days payable outstanding.

**Finally, calculate the operating cycle.**Calculate the operating cycle using the equation above.

## FAQ

**What is an operating cycle?**

An operating cycle is the difference in days between the sale of a good from inventory and the days it takes to receive payment on that sale.