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 Complete This Information Collection is Estimated to Average 2017

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accounting ratios understanding average collection period in this session we'll delve into the significance of this metric in evaluating a company's efficiency in collecting accounts receivable the average collection period measures the average number of days it takes for a company to collect payments from its customers it's calculated by divid in the number of days in the period by the account's receivable turnover ratio a shorter average collection period indicates that a company is collecting payments from its customers more quickly which reflects efficient credit management and effective collection procedures conversely a longer average collection period may suggest delays in receiving payments or issues with credit policies understanding this metric is essential for businesses as it helps them assess their cash flow liquidity and credit management practices it also provides insights into the effectiveness of the company's sales and collectio

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