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The Average Collection Period Is Frequently Used to Assess the Effectiveness

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The average collection period is frequently used to assess the effectiveness of a company's credit and collection policies.


Definitions:

Sales

The total amount of goods or services sold by a company.

Best-Case Scenario

The most optimistic prediction of how a situation could unfold in the future.

Earnings Before Taxes

A measure of a company’s financial performance that calculates profits before taxes are deducted.

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