Page 63 - FINAL CFA SLIDES DECEMBER 2018 DAY 11
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Session Unit 11:
38. Working Capital Management
tanties
The annualized cost of trade credit decreases as the payment period increases. If the company does not take
the 2% discount within the first ten days, it should wait until the due date (day 60) to pay the invoice..
Our primary quantitative measure of payables management is average days of payables outstanding,
which can also be calculated as:
