What is the term for the time taken to purchase or manufacture inventory, sell the product, and collect the revenue?

The term that describes the time taken to purchase or manufacture inventory, sell the product, and collect the revenue is known as the operating cycle. This concept is essential in understanding how long it takes for a business to turn its inventory into cash, which is a critical measure of liquidity and operational efficiency.

The operating cycle begins with the acquisition of inventory, which involves the manufacturing or purchasing of products. Once the inventory is available, the business then sells these goods, leading to the second phase of the cycle. Finally, the cycle concludes when the revenue from the sales is collected. This entire process is crucial for managing cash flow, as it directly impacts how effectively a business can sustain its operations and fulfill its financial obligations.

Other terms like net operating income, cash flow cycle, and financial cycle do not capture this specific sequence of activities. Net operating income refers to the income generated from operations after deducting operational expenses, while the cash flow cycle focuses on the timing of cash inflows and outflows in a broader context. The financial cycle, though related, does not specifically delineate the steps from inventory management through sales to cash collection. Thus, operating cycle is the most accurate term to describe the process outlined in the question.