A firm has an average payment period of 35 days and has an average collection period of 60 days annual sales are 3.5million there is no difference in the investment per dollar of sales in inventory?
It is a liquidity measurement ratio of a company. It is coumpted by dividing the average inventory by the average daily cost of goods sold(cost of goods sold divided by 365). It is a rough measure of...
Most organizations make sales on credit. They usually deliver goods/services to their customers without taking the payments due immediately. There could be a credit cycle understanding between them...
Average Payment Period is the total opposite of the Average Collection Period. This is the average time taken by the company to pay off its credit purchases. Formula: APP = Accounts Payable / (Annual...