Intermediate Accounting 5 The Statement of Cash Flows 3. Reporting Cash Flow From Operations Operating cycle A company's operating cycle is the average time taken to spend cash for inventory, process and sell the inventory. collect the accounts receivable and convert them back into cas Net income and the net cash flow within the operating cycle are unlikely to be the same because of differences between the timing of the cash flows and the recognition of revenues and expenses3. Reporting Cash Flow From Operations Operating cycle A company's operating cycle is the average time taken to spend cash for inventory, process and sell the inventory, collect the accounts receivable, and convert them back into cash. Net income and the net cash flow within the operating cycle are unlikely to be the same because of differences between the timing of the cash flows and the recognition of revenues and expenses. Intermediate Accounting 5 The Statement of Cash Flows