Final answer:
The operating cycle is a series of activities that a company undertakes to generate sales and cash, involving purchasing, production, and sales processes.
Step-by-step explanation:
The Operating cycle is a series of activities that a company undertakes to generate sales and ultimately cash. It involves the day-to-day operations of the business, such as purchasing raw materials, producing goods or providing services, and selling them to customers. The operating cycle starts with cash being used to purchase inventory, which is then used to produce goods. The goods are sold to customers, and the resulting cash is used to replenish inventory and continue the cycle.