Longer the operating cycle, working capital quantum is more.

This statement is True.

Operating cycle refers to the time it takes for a company to convert its inventory into cash. It includes the time taken to purchase raw materials, convert them into finished goods, sell the goods, and collect cash from customers. On the other hand, working capital refers to the funds that a company requires to carry out its day-to-day operations.

Explanation:

1. Definition of Operating Cycle:
The operating cycle of a business is the time it takes for a company to acquire raw materials, convert them into finished goods, sell the goods to customers, and collect cash from customers. It is a measure of how long it takes for a company to generate cash from its operations.

2. Components of the Operating Cycle:
The operating cycle consists of the following components:
a) Purchase of raw materials: This is the time taken by a company to purchase raw materials required for production.
b) Conversion of raw materials into finished goods: This is the time taken by a company to convert the purchased raw materials into finished goods.
c) Sale of finished goods: This is the time taken by a company to sell the finished goods to customers.
d) Collection of cash from customers: This is the time taken by a company to collect cash from the customers who have purchased the goods.

3. Relationship between Operating Cycle and Working Capital:
The operating cycle has a direct impact on the working capital requirements of a company. The longer the operating cycle, the more working capital a company requires to fund its day-to-day operations.

4. Working Capital and Operating Cycle:
a) Inventory: A longer operating cycle means that the company will hold inventory for a longer period of time. This requires additional funds to maintain the inventory levels, resulting in higher working capital requirements.
b) Accounts Receivable: A longer operating cycle also means that the company will have to wait for a longer period of time to collect cash from customers. This increases the accounts receivable balance and the need for working capital.
c) Accounts Payable: On the other hand, a longer operating cycle may also result in the company being able to delay payment to its suppliers. This can help in managing working capital to some extent.

5. Conclusion:
In conclusion, the statement "Longer the operating cycle, working capital quantum is more" is true. A longer operating cycle increases the working capital requirements of a company due to the need for higher inventory levels and increased accounts receivable.