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Hrm/531 Week 4 Paper

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4: Average settlement period for trade receivables It's an efficiency ratio "that calculates how long, on average, credit customers take to pay the amounts that they owe to the business" (Mclaney and Atrill, 2012 p. 256). It is obvious that a business will prefer a short settlement period than a large one to improve both cash flow and cash flow efficiency.

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