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What is the relationship between the following compounds?
Accounts Payable Period
The average time it takes for a business to pay off its suppliers and vendors.
Liquidity Reserves
Liquid assets held by an entity as a buffer against future contingencies or unforeseen expenses.
Operating Cycle
The average period between purchasing or acquiring inventory and receiving cash from sales of the inventory, critical for managing company liquidity.
Cash Cycle
The time period between the outlay of cash for the purchase of inventory and the collection of cash from customers for the sale of that inventory.
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