 In this presentation we're going to talk about the operating cycle for a merchandising company. When we think about the operating cycle for a merchandising company we can contrast this to a service company, a service company providing a service in order to generate revenue, and a merchandising company providing merchandise. The merchandise now being an added factor, adding a bit more complexity to the cycle and is of course what we want to concentrate on as the new thing, the different thing, the thing that we need to get practice with as we move from a service company to a merchandising company. The cycle will look something like this, first we're going to be purchasing inventory. So the inventory could be anything that we are going to purchase for the purpose of reselling in order to generate revenue. Once we have the inventory at some point in the future we will hope to sell that inventory to a customer. We're going to say here that we're going to make the sale on account. Now we could make the sale for cash and receive payment at the point of sale, but in order to work through the standard cycle we're going to work this cycle and we're going to say we sell something on account, meaning we invoice the client, we provide the inventory to the client selling the inventory and expect to receive payment at a later point in time. And when we do receive payment then of course we're going to collect the cash decreasing the accounts receivable and increasing the cash at that time and this will be the standard process. We're going to purchase inventory, we're going to sell it to the customer, we're going to receive cash. Now this is going to be just an idea of what we want to keep in our mind of course when we are a merchandising company we're buying inventory, we're marking it up in order to get a profit margin, we're selling it to the customer, we're getting that cash and the cycle then will continue. Don't mix this up with the other cycles that we have talked about which are going to be the standard purchasing cycle where we can think of just the purchasing in and of itself in other words. We may not be purchasing just for cash, we might be purchasing on account and have a similar cycle in this process as well, meaning we're going to purchase inventory on account and at a later time we're going to pay what we owe pay off the account and this cycle over here when we're dealing with the customer of course is the receivable cycle where we're typically going to invoice the client, have an account receivable and then collect payment at a later point and of course we could at some point receive cash directly from the customer. The idea of this cycle is to differentiate from the service company in that we have this added factor, this added factor of inventory and this process will be happening in one form or another where we will be purchasing inventory, the goal of the purchase of the inventory is to mark it up, that's how we generate the revenue. Once we mark it up we sell it to the customer at the marked up price and if we sell it on account then we increase the accounts receivable and we increase the sales then of course eventually we collect the cash and once we have the cash we have the funds in order to repeat this process to generate more revenue.