If a Firm's Average Collection Period Is 42 Days, and This

question 105

Essay

If a firm's average collection period is 42 days, and this compares favorably to the industry average, what questions may you want to ask before assuming that the firm is "efficient"?

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Definitions:

Tangible Objects

Physical items that can be seen, touched, and measured, as opposed to abstract concepts or virtual items.

Organizational Culture

A set of shared values, beliefs, and practices that characterizes an organization and guides its members' behaviors.

Cultural Values

The core principles and ideals upon which an entire community exists and functions, shaping behavior and setting standards for what is important.

Subcultures

Groups within a larger culture that have their own distinct values, behaviors, and traditions.