If a Company's Average Payable Period Ratio Is Significantly Lower

question 140

True/False

If a company's average payable period ratio is significantly lower than the credit terms vendors offer, it may be a sign that the company is not using its cash most effectively.

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Definitions:

Facilities and Handling

Refers to the physical infrastructure and processes used for storing, managing, and transporting goods within a supply chain.

Retail Storage

The space and facilities used to hold goods in a retail environment before they are sold to consumers, impacting the availability and accessibility of products.

Supply Chain Performance

The measurement and assessment of the efficiency, effectiveness, and adaptability of supply chain activities and processes.

Transportation Cost

The expense incurred in moving goods or materials from one location to another.