question archive To assess the firm’s average collection period and average payment period ratios, what additional information is needed, and why?
To assess the firm’s average collection period and average payment period ratios, what additional information is needed, and why?
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To assess the firm’s average collection period and average payment period ratios, what additional information is needed, and why?
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Additional information is necessary to assess how well a firm collects receivables and meets payables. The average collection period of receivables should be compared to a firm’s own credit terms. The average payment period should be compared to the creditors’ credit terms.
